09-11 Sep, 2015 - Singapore, SINGAPORE
Goodwood Park Hotel Singapore
Goodwood Park Hotel Singapore
Due to the oil price slide over the past year, some of the ethylene projects in the US have been cancelled or delayed. This has had a bearing on shale gas – which has lost its attractiveness as a feedstock option for Asian petchem producers.
The price drop has made Asian petrochemical producers turn to naphtha based crackers. Taking advantage of low feedstock costs, Asian petrochemical producers have clocked high margins for turning naphtha into ethylene in 2015.
The region’s petchem plants are operating at full capacity to make ethylene. LG Chem, one of Asia’s top five naphtha crackers, is running its plants at full capacity – two units with a combined 2.2 million tonnes per year (tpy) of capacity.
Analysts predict that the delays in projects in the US will keep ethylene tight and Asian petrochemical margins strong for the next several years.
Analysts anticipate the current boom for naphtha crackers to last through the end of 2017.
The first half of 2015 also witnessed a heavy maintenance schedule for naphtha units in Asia, which aided to sustain cracking margins.
Some of those going into maintenance schedules – South Korea, that is Asia’s top ethylene exporter to China, shut four crackers with a total of nearly 3.8 million tpy of ethylene capacity. Taiwan’s Formosa Petrochemical Corp shut its 700,000 tpy Mailiao unit in June while Japan’s Sumitomo Chemical Corp and Mitsubishi Chemical shut one each of their crackers.
Although the petrochemical producers in Asia are currently earning profits from naphtha crackers, in the long term it’s believed that they will opt for natural gas as a cheaper and abundant feedstock.
Some of the Asian petchem producers are already undertaking projects in this regard. For instance, LG Chem is all set to complete its JV in Kazakhstan in 2019 – that will produce 840,000 tpy of ethylene from ethane.
There is also South Korea’s Lotte Chemical – via its US unit that is expected to form a joint ethane cracker with Axiall in Louisiana in 2019 to produce ethylene.
More insights on the petrochemical markets will be shared at 22nd Asia Petrochemical Summit convening in Singapore on 10-11 September, 2015.
Contact Ms. Huiyan at huiyan@cmtsp.com.sg or call +65 6346 9113 for more information.
