The Middle East arguably exerts the most important influence on the global petrochemical industry today and will remain so for many years to come. However, the prospects of war in Iraq are of concern, and logistical and raw material challenges could hinder the region's growth. Saudi Basic Industries Corp., or SABIC, most of which is owned by the government of Saudi Arabia, grew to petrochemical production of 40.6 million tons and revenue of $9 billion in 2002, becoming the 11th largest petrochemical producer in the world. Iran, through the government-owned National Petrochemical Co., has made its petrochemical industry second to Saudi Arabia. Iranian petrochemical production was 12.5 million tons in 2001. Numerous other countries in the region, including the United Arab Emirates, Kuwait, Qatar, Oman, and Egypt, have completed major petrochemical projects or are planning them. SABIC, created 24 years ago to add value to Saudi Arabia's enormous hydrocarbon resources, has grown to become one of the world's largest and lowest-cost petrochemical producers, with more than 25 million tonnes/year of capacity, nearly all formed by joint ventures. SABIC Vice President and CEO Mohamed H. Al-Mady says the company will expand to keep pace with expected petrochemical demand growth of 5%-10% annually, adding an additional 13 million tons/year of new capacity by 2010. to low-cost raw materials gives Sabic a big cost advantage over its competition: it pays Saudi Aramco (Riyadh), another government-controlled company, 75 cents/million Btu for its raw materials gas primes, compared to more than $5/million Btu paid by petrochemical producers on the U.S. Gulf Coast at CW press time. Most of Sabic's petrochemical complexes are gas-based. However, the company has recently started producing aromatics, using the Cyclar process based on liquefied petroleum gas (LPG). Sabic gets LPG at a 30% discount compared to international prices. Sabic last year completed construction of two liquid feed-based olefins plants as part of a diversification strategy into other olefins derivatives. SABIC concentrated its production at two sites: Al Jubail, on the Persian Gulf coast, and Yanbu, on the Red Sea. SABIC increased its total production capacity from 7 million tons/year to 25 million tons/year between 1985 and 1998, adding an additional 10 million tons/year by the end of 2000. Sabic last year completed the construction of three crackers which added a total of 2.3 million tonnes/year. ethylene capacity mt/year.