Chemical profile: triethylene glycol

Chemical Profile: Triethylene glycol

28 January 2008 00:00  [Source: ICB]

DEMAND

2006: 125m lbs (56,700 tonnes) 2007: 126m lbs 2011: 131m lbs, projected. Demand equals production plus imports (estimated to average 4m lbs/year) less exports (estimated to average 25m lbs/year). Imports and exports of triethylene glycol (TEG) have not been reported by the US Census Bureau since 1998. Source: ICIS Chemical Business

GROWTH

Historical (2002-2007): 1%/year. Future: 1%/year through 2011. Source: ICIS Chemical Business

PRICE

Historical (2002-2007): High, 90 cents/lb, contract, Gulf, tanks, FOB low, 32 cents/lb, same basis. Current: 86-90 cents/lb, same basis. Source: ICIS pricing

USES

Natural gas dehydration, 58% solvents, 11% plasticizers, 11% polyurethanes (PU), 7% humectants, 4% unsaturated polyester resins, 3% miscellaneous, including coating resins and textile lubricants, 6%. Source: ICIS Chemical Business

MARKET PERSPECTIVE

The major use of TEG is in the drying of natural gas, due to its strong hygroscopic nature. TEG is favored over other, chemically similar desiccants such as monoethylene glycol (MEG) and diethylene glycol (DEG) because of its higher boiling point, viscosity and specific gravity. Gas dehydration accounts for nearly 60% of TEG's consumption and is its primary growth segment - growing at about 1.8%/year for the past five years.

TEG's growth in applications other than natural gas drying is likely to remain stagnant, as TEG competes at a cost disadvantage with other glycols in these segments. Consequently, its use is limited to those applications where its higher boiling point or lower volatility is valued. These application areas are stable, if not actually growing in volume.

Like DEG, TEG is a by-product of MEG manufacturing. But unlike DEG, TEG is not produced in excess of market demand. To meet market demand, additional TEG is manufactured from DEG, with the addition of ethylene oxide (EO).

The market for TEG has been tight in recent times because of steadily increasing demand, but also because of constraints in the supply side, in addition to limited production capacity.

DEG has been tight, as producers channel EO away from MEG into alternative EO derivatives, like ethanol amines for instance, which have more attractive margins. As a result of the tight supply situation, and increasing feedstock costs, pricing for TEG has increased by 15%/year over the past five years.

OUTLOOK

The market for TEG has become considerably tighter this year, following the lead of ethylene and DEG.

The firm demand and tight supply situation has driven up TEG prices to new highs - about 20% above last year's average price range.

The tight supply situation and high pricing are expected to continue for at least the short term as the fundamental problem facing the ethylene glycols (EGs) market is a lack of new capacity and a tight supply situation for DEG.

Over the forecast period, TEG demand in the US is anticipated to rise by 1%/year.

US triethylene glycol capacity, millions of lbs/year

Company	Location	Capacity
Dow Chemical	Plaquemine,Louisiana	45
Dow Chemical	Taft, Louisiana	40
Eastman Chemical	Longview, Texas	8
Equistar Chemicals	Bayport, Texas	25
Formosa Plastics	Point Comfort, Texas	5
Huntsman	Port Neches, Texas	8
Old World Industries	Clear Lake, Texas	11
PD Glycol	Beaumont, Texas	9
Shell Chemicals	Geismar, Louisiana	24
TOTAL		175

SOURCE: ICIS CHEMICAL BUSINESS

*Million lbs/year of triethylene glycol (TEG) derived as a coproduct in the manufacture of monoethylene glycol, from ethylene oxide (EO) hydration, and "on-purpose" TEG production by reacting diethylene glycol (DEG) with EO. The industry generally operates to minimize by-products formation in ethylene glycol (EG) production. Thus, about half the TEG demand is satisfied by synthesis from DEG. Capacities are nameplate. Actual production depends on both the production level and grade of EG produced.

Eastman Chemical and Formosa Plastics use their TEG to manufacture dibenzoate plasticizers, chiefly compounded with polyvinyl chloride (PVC) resins, and other plasticizers.

Equistar Chemicals is a wholly owned subsidiary of LyondellBasell. PD Glycol is a 50/50 joint venture between Equistar and DuPont.

Profile last published November 15, 2004

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