01 July 2008 11:16 [Source: ICIS news]
LONDON (ICIS news)--Oil demand projections have been revised upwards over the medium term on the expected increased requirement for petrochemical feedstocks naphtha and liquefied petroleum gas (LPG)/ethane, the International Energy Agency (IEA) said on Tuesday.
Prospective petrochemicals production capacity additions could total 40m tonnes/year, the IEA said, leading to a requirement for an extra 440,000 bbl/day of naphtha and 330,000 bbl/day of LPG/ethane by 2013.
The increased naphtha demand would affect ?xml:namespace>
An individual country's naphtha or LPG/ethane demand would also be driven by other factors, the IEA said, but the potential emergence of Asia as the largest petrochemical producing region represented a geographical shift from the traditional centres of supply: the OECD North America and
Downside risks associated with the availability of feedstock run alongside the typical credit and other risks associated with upstream and downstream oil industry projects.
Competition for naphtha supplies - or condensate supplies allied to splitting capacity - could intensify in the medium term, the IEA said.
Petrochemical projects linked to gas liquids feedstock would hinge on corresponding oil and gas supply growth prospects, it added in its Medium Term Oil Market Report.
Calculating the impact of incremental petrochemical production on oil demand over the medium term was complicated by the desire of operators to maximise feedstock flexibility, the agency said.
Its demand scenario uses available feedstock data, from a limited number of countries, assumptions based on existing plants, historical trends and global utilisation.
“While additional expansions above those tracked here could increase the naphtha and LPG/ethane forecasts further, it is unclear to what extent regional competition for feedstocks could impact profitability and ultimately growth in the sector,” the agency said in its report.
“Feedstock substitution may also become more prevalent in the medium term,” it added.
The regional dynamics of petrochemicals demand could undermine global production capacity growth and required further study, the IEA said.
The Paris-based IEA is an energy policy adviser to 26 member nations.
To discuss issues facing the chemicals industry visit ICIS connect
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections