Asia triples demand for US propane; Arabian Gulf raises petchems exports

Petrochemicals news you need to know.

US to add 8 mtpa of new PE production capacity by 2020

Surplus ethane output in the United States is expected to reach nearly 700,000 barrels per day by 2020, even after the commissioning
of new ethylene production capacity, according to Petrochemical Update's US Ethane, EthyIene & PoIyethyIene: Exports & Markets Report, released in December.

The new additional ethylene production capacity planned by 2020 is projected at more than 10 million metric tons. In the same timeframe, more than 8 million metric tons of new additional polyethylene production capacity is announced to come online.

Excess North American polyethylene production available for export will be 6-9 billion pounds within the 2016-2020 timeframe, assuming 75% of the announced polyethylene projects are actually built and commissioned by 2020.

Arabian Gulf petchems exports rise

Petrochemical companies in the Gulf Cooperation Council (GCC) countries exported record 67.2 million tons of chemicals valued at $62 billion in 2014, up from $54.6 billion in 2013, according to an industry report by the Gulf Petrochemicals and Chemicals Association (GPCA) published in November.

In 2014, Saudi Arabia accounted for 53% of the total regional export volume, or 35.9 million tons valued at $36.2 billion, followed by Qatar with 20% and the United Arab Emirates with 10% of the total regional exports. Kuwait and Oman each made up 7% of the total volume, while Bahrain accounted for 3%.

Meanwhile, GCC petrochemical exports to China rose to 13.5 million tons in 2014, valued at $15.4 billion, according to the GPCA. Export volumes and revenues were both up 5% year on year despite the slowdown in the Chinese economy.

According to GPCA estimates, the GCC petrochemical industry manufactured 136.2 million tons of products in 2014, earning $87.4 billion in revenue. 

US propane exports to grow on Asian petchems demand

US propane exports to Asia tripled in 2015, measuring 189,000 barrels per day in January-August 2015 compared to 65,000 b/d in the first eight months of 2014, according to the US Energy Information Administration (EIA).

With significant expansion of its propane dehydrogenation (PDH) capacity, the petrochemical sector is the fastest-growing segment of propane demand in Asia.

As US propane production has increased and domestic demand has remained relatively flat, the US has transitioned from being a net propane importer to a net exporter. Sources: US Energy Information Administration, US Department of Commerce.

The glut of US propane supply in the last few years has pushed propane prices lower in the US, opening up arbitrage opportunities. According to the EIA, if current pricing trends continue, growing petrochemical demand, especially in Asia, will be the primary market for further increases in US propane exports.

Source: US Energy Information Administration, Bloomberg. 2015 data is for January through September.

Veresen, Enterprise Products Partners add ethane infrastructure capacity

Calgary, Alberta-based Veresen plans to build and operate a new wholly-owned ethane storage facility in Saskatchewan, Canada, approximately 20 kilometres north of the Empress natural gas liquids (NGL) complex, the company said on November 12.

The $140 million salt cavern facility, which is expected to become operational in the second half of 2018, will have capacity to store around 1 million barrels of ethane.

NOVA Chemicals will use the majority of the storage capacity under a 20-year agreement with Veresen.

Meanwhile, Enterprise Products Partners announced on November 9 it had executed an additional long-term contract to export ethane from its 200,000 bar b/d terminal under construction at Morgan’s Point, Texas. With the additional volumes, the terminal has contracted about 90% of its operating capacity.

The export terminal, which is on schedule to start operations in Q3 2016, will have the capability to load fully refrigerated ethane at rates up to 10,000 barrels per hour.

New service contract wins for Mammoet, Ineos Technologies

Mammoet USA has been awarded a heavy lift and transport engineering contract for Sasol’s ethane cracker and derivatives complex in Westlake, Louisiana, the company announced on November 11.

The contract covers all of the heavy lift and transport engineering, receiving modules and oversized equipment from domestic and overseas yards, transporting the cargo to site and all major lift work.

Meanwhile, PTTGC America has selected Ineos Technologies’ Innovene S HDPE process for its proposed polyethylene project near Dilles Bottom, Ohio, Ineos announced on November 12.

The Innovene S HDPE plant will consist of two lines with a total capacity of 700 KTA, which will produce a wide range of polyethylene grades to serve demand for high-performance products in the US and abroad.

LyondellBasell is moving ahead with plans to build the world's largest propylene oxide (PO) and tertiary butyl alcohol (TBA) plant, the company announced on November 19.

LyondellBasell will soon begin front-end engineering design work and file environmental permit applications for the plant, which will be located at the company’s complex in Channelview, Texas. This phase will also include funding to order long lead-time equipment.

The company expects to make a final investment decision following completion of the engineering design work.