APIC 2014: The changing face of the petrochemical industry

09:21 AM | May 15, 2014 | Natasha Alperowicz in Pattaya

The first day of this year’s Asia Petrochemical Industry Conference (APIC), currently under way at Pattaya, Thailand, was devoted to market studies, forecasts of the global petrochemical industry, and shifting trends in the industry. “Changes in the relative availability and prices of feedstocks are driving transformation in the world petrochemical industry,” says Roger Lee, managing director of Tecnon OrbiChem. The new global feedstock slate is causing supply and price adjustments, many permanent, for the coproducts of naphtha cracking, including ethylene, propylene, butadiene, and benzene. Companies are therefore adopting new strategies with technology as the key component, he says. Coal, gas, and biomass are among the top alternative feedstocks being exploited for petrochemicals' production.
Environmental pressures, meanwhile, are leading companies to produce biobased materials, says Charles Fryer, chairman of Tecnon Orbichem. “The choice of biobased monomers and polymers is limited at present but is widening rapidly,” he says. The most promising monomer technologies are in the area of C4 and C5 chemistry, including succinic acid; butadiene; 1,5 pentanediamine; 1,4 butanediol; and 2,5 furandicarboxylic acid. However, new biobased polymers, such as polyethylene furanoate, will have to undergo lengthy testing before they are accepted. “Companies introducing biobased monomers will have to demonstrate that their operations do not reduce food supply; that a direct replacement monomer costs the same as its synthetic equivalent, or maybe 10–20% more if it allows the end user to boast of its environmental friendliness; that a new monomer gives rise to a new polymer that has as good or better performance than existing polymers,” he says.
Meanwhile, major shifts are currently taking place in the petrochemical industry in part because of the advent of cheap shale gas feedstock in the United States, delegates have been told. Despite shortages of ethane feedstock in the Mideast, the region will remain the largest exporter of ethylene derivatives. The pace of investment in the Mideast, particularly in Saudi Arabia, will slow, but ethane crackers will still be built in Iran, Qatar, the United Arab Emirates, and Iraq.
China is the main growth engine for petrochemicals. The country at present is only 60% self-sufficient in ethylene but has an aggressive investment program in coal-to-olefins plants and naphtha-based complexes. The country’s self-sufficiency will increase, but, in absolute terms, ethylene derivatives imports will also increase. In the future, the Mideast, North America, Russia, and Asia will compete to sell product to China. In the rest of Asia, Singapore, Thailand, and Malaysia are emerging as significant manufacturing centers with competitive export positions, while mature regions, such as South Korea, Taiwan, and Japan will continue rationalizing old capacities and specializing.