MidEast C3/PP capacity to change global balance

22 May 2007 17:10  [Source: ICIS news]

ANTWERP, Brussels (ICIS news)--New propylene and polypropylene (PP) production in the Middle East will alter global supply balances and cause Europe to move from a net PP exporter to an importer by 2009, according to an industry expert.

 

World propylene supply would increase from 66.5m tonnes in 2005 to 85m tonnes in 2010, with much of the new capacity coming from ‘on purpose’ propylene plants, rather than olefin steam crackers, said Thomas Van de Velde, commercial manager olefins and co-products for Borealis at the fourth World Olefins Conference in Antwerp, Belgium.

 

Looking further ahead, of the new capacity due by 2015, more than 22m tonnes or 80% would come from the Middle and Far East. Much of this would then be turned into PP, aimed at exporting to other regions, said Van de Velde.

 

Multi billion dollar expansions in the Middle East would include production facilities in Ruwais, near Abu Dhabi in the United Arab Emirates around 2010, said Van de Velde.

 

These would include two enhanced PP plants using Borealis’ Borstar technology that would boast annual capacities of  800,000 tonnes/year, in addition to new olefins production capacity and the world’s largest olefins conversion unit, he added. 

 

Propylene growth in Europe would be slow, rising from 15.3m tonnes in 2005 to 15.6m tonnes in 2010, said Van de Velde

 

Growth rates for propylene derivatives would similarly sit below GDP levels, with the exception of PP, which would annually increase by 3.7% between 2005-2010.

 

By 2009, Van de Velde said that this increase in European PP demand would easily be met by incoming Middle Eastern product and that Europe would move from an exporter of PP to an importer, thus reducing upstream European demand for propylene.

 

Globally, however, demand for propylene would continue to exceed supply, he said, with the result that propylene prices would stay high compared with ethylene. Europe would still stay vulnerable to unplanned outages, he added.

 

Borealis employs 4,500 staff across 11 countries and has an annual sales revenue of €5bn ($7bn).

 

($1=€0.74)

By: Edward Cox
+44 20 8652 3214

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