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WORLDPETROCHEMICAL
May 2016 MAGAZINE170989
Final Wrap-upThe economic Supercycle is over. One reason for the end of the Supercycle is the retirement of the Babyboomers. Another reason is China’s economic reforms. These reforms have major implications for the country’s petrochemicals supply and demand patterns. The petrochemicals industry thus needs a new global business approach, aligned with the real needs of changing social, political and economic drivers. These challenges are opportunities for the petrochemicals industry, given its ability to efficiently deliver the products neededto improve our lives in the future
Non-traditional routes to olefins production have gained importance, and shale developments have provided surplus ethane. This has an impact on polymer trade and on relative economics, but naphtha cracking will still be needed. A lower crude oil scenario has moved naphtha cracking economics into more positive territory
The aromatics industry is confronted with uncertain supply trends, recent gasoline strength and a high dependency on China. The need for heavy naphtha feedstock for incremental PX demand has promoted numerous dedicated condensate splitter projects. Integration with fuels refineries and steam crackers will enhance viability
Behrooz MirzaeiCEO Royal Global Energy
WORLDPETROCHEMICAL
May 2016MAGAZINE 1709 88
The new demand scenario will require a shift in the energy mix towards a lower carbon intensity, and growing efficiencies. Gas will be a key enabler, whilst oil use as a raw material for petrochemicals will steadily increase. Low oil prices are further promoting refining and petrochemical integration. Peak Oil Demand will take some time to reach.Incremental volumes of oil and gas will be produced, and more NGLs will be available .
A prolonged scenario of low oil prices may affect shale developments. This could gradually reduce the current surplus of US ethane. Relative competitiveness for domestic ethylene may be reduced, but remains in place. The LPG surplus will remain for a prolonged period of time, enabling its role as an alternative feedstock for ethylene production. Delayed expansions in refining capacity and low oil prices have resulted in a temporary gasoline tightness. This will change in the near future. New refining capacity and growing fuel efficiencies will ensure comfortable naphtha supply in the future.
WORLDPETROCHEMICAL
May 2016MAGAZINE 1709 90
Summary Conclusions:
Petrochemical Feedstocks will be
well supplied in the next few years
Efficiencies needs are accelerated in the “New Demand Scenario”. Demand for oil willincreasingly be for petrochemicals, the material of choice for improving quality of life
As more oil and gas will be required, more NGLs will be available. A lower oil scenariomay will still leave US with wide light NGLs availability and LPG exports, whilst ethanebalances could get tighter
Despite some recent tightness in gasoline, fuel efficiencies and rapidly growing refiningcapacity will ensure comfortable naphtha supply in international markets.
May 2016 MAGAZINE170991
WORLDPETROCHEMICAL
www.icis.com 60
Condensate splitter/aromatics sits near middle of cost curve
Cru - Nap – Crude Oil based Naphtha Reformer Aromatics Complex ; Cond - Nap – Condensate based Naphtha Reformer Aromatics ComplexSTDP - STDP Complex with toluene feed ; MX - PX Standalone Complex with feed MX
ME – Middle East , NA – North America, EU – Europe, NEA – North East Asia, SEA – South East Asia
Crude-Naphtha Reformate, 60%
Condensate-Naphtha Reformer, 15%
TDP, 11%
Pygas, 4%
TA, 9%
Global PX Capacity by Source
Lower crude oil price presents a lower feedstock cost to integrated aromatics production both from crude and condensatePX units fed by condensate splitter sits somewhere in the middle of the cost curve
400
800
1200
1600
0 5 10 15 20 25 30 35 40 45 50
Cash
cost
s, C
onst
ant 2
015
$/to
nne
Cumulative Capacity, million tonnes/year (overall account for 90% global share)
Estimated Cash Costs of Regional PX production(Constant 2015 $)
EU-MX
NEASTDP
2016SEA-Cond-Nap
NEA-Cond-Nap
ME-cru-NapSEA-Cru-Nap EU-cru-Nap NEA-Cru-Nap
NEA-Cond-NapNA-Cru-Nap
EU-MX
SEA-Cond-Nap
2015
2014
ME-cru-Nap
NA-Cru-NapSEA-Cru-Nap
EU-cru-NapNEA-Cru-Nap
NEA-MXNA-MX
SEASTDP
NA-MXNA-STDP
NEA-MX NEA-STDPSEA-STDPME-cru-Nap
SEA-Cru-NapEU-cru-Nap NEA-Cru-Nap
ME- STDP
SEA-Cond-NapNEA-Cond-Nap
NA-Cru-Nap
SEA-STDP-NapNEA-STDP-Nap
NA-MXNEA-MX
Condensate splitter/aromaticssits near middle of cost curve
Cru - Nap – Crude Oil based Naphtha Reformer Aromatics Complex ; Cond - Nap – Condensate based Naphtha Reformer Aromatics ComplexSTDP - STDP Complex with toluene feed ; MX - PX Standalone Complex with feed MX
Lower crude oil price presents a lower feedstock cost to integrated aromatics production both from crude and condensatea
PX units fed by condensate splitter sits somewhere in the middle of the cost curve
ME – Middle East , NA – North America, EU – Europe,NEA – North East Asia, SEA – South East Asia
www.icis.com 60
Condensate splitter/aromatics sits near middle of cost curve
Cru - Nap – Crude Oil based Naphtha Reformer Aromatics Complex ; Cond - Nap – Condensate based Naphtha Reformer Aromatics ComplexSTDP - STDP Complex with toluene feed ; MX - PX Standalone Complex with feed MX
ME – Middle East , NA – North America, EU – Europe, NEA – North East Asia, SEA – South East Asia
Crude-Naphtha Reformate, 60%
Condensate-Naphtha Reformer, 15%
TDP, 11%
Pygas, 4%
TA, 9%
Global PX Capacity by Source
Lower crude oil price presents a lower feedstock cost to integrated aromatics production both from crude and condensatePX units fed by condensate splitter sits somewhere in the middle of the cost curve
400
800
1200
1600
0 5 10 15 20 25 30 35 40 45 50
Cash
cost
s, C
onst
ant 2
015
$/to
nne
Cumulative Capacity, million tonnes/year (overall account for 90% global share)
Estimated Cash Costs of Regional PX production(Constant 2015 $)
EU-MX
NEASTDP
2016SEA-Cond-Nap
NEA-Cond-Nap
ME-cru-NapSEA-Cru-Nap EU-cru-Nap NEA-Cru-Nap
NEA-Cond-NapNA-Cru-Nap
EU-MX
SEA-Cond-Nap
2015
2014
ME-cru-Nap
NA-Cru-NapSEA-Cru-Nap
EU-cru-NapNEA-Cru-Nap
NEA-MXNA-MX
SEASTDP
NA-MXNA-STDP
NEA-MX NEA-STDPSEA-STDPME-cru-Nap
SEA-Cru-NapEU-cru-Nap NEA-Cru-Nap
ME- STDP
SEA-Cond-NapNEA-Cond-Nap
NA-Cru-Nap
SEA-STDP-NapNEA-STDP-Nap
NA-MXNEA-MX
Cumulative Capacity, million tonnes/year (overall account for 90% global share)
Global PX Capacity by Source