Sustainable economic growth and export diversification potential for Asian LNG-exporting countries: LNG–petrochemical nexus development using product space model

Abstract

Asian liquefied natural gas (LNG)-exporting countries have large natural gas reserves with a combined LNG export share value of 58% globally. Nevertheless, their global share in petrochemical exports is merely 2.2%. Among the selected countries, Indonesia and Malaysia have exploited 39% and 17% of the products in their petrochemical sectors, but the UAE, Myanmar, Oman, Qatar, and Brunei have exploited only 2%–10%. The significant potential for these countries with regard to exploiting these petrochemical products to scale up their export diversification, in turn leads to sustainable economic growth. The primary reason for their low global share is insufficient knowledge concerning their production capacity, as well as the sector's feasibility and potential with respect to their capabilities. This study thoroughly investigates the export diversification potential and opportunities for Asian LNG-exporting countries by exploring the nexus between LNG and petrochemicals using a product space model (PSM). The results indicate that production of unexploited petrochemicals is imminent in Indonesia and Malaysia, while the UAE, Myanmar, and Oman have moderate opportunities for exploration. These findings can assist policymakers in formulating realistic policies in accordance with their country's capabilities. It will also assist entrepreneurs in identifying potential sectors for establishing new enterprises.