29 June 2009 00:00 [Source: ICB]
Methyl tertiary butyl ether (MTBE) is used almost exclusively as a fuel component in motor gasoline. It is one of a group of chemicals commonly known as oxygenates, which are used to raise the oxygen contentof gasoline.
MTBE can also be used to make pure isobutene from C4 streams. It is a good solvent and extractant. Other uses are in methacrolein and methyl methacrylate (MMA).
In the US, due to the widespread release of MTBE from underground storage tanks, various states have banned its use. As a result, US production has declined and most gasoline retailers have stopped using MTBE.
Similarly, demand has declined in Western Europe, but production has fallen more. This is due to the EU renewable fuels directive that promotes the use of biofuels through tax incentives, and some MTBE producers converted plants to ethyl tertiary butyl ether (ETBE). But, tight supply has driven up ETBE prices rendering it less attractive against MTBE, and some plants have switched back.
The European market is quite tight with strong demand for export, notably from the Arab Gulf, and South America.
The fall in European consumption is being offset by strong demand in new markets, such as Africa and the Middle East. US exports are now being directed to South and Central America, rather than Europe, where plants have also been converted to ETBE production for export.
European prices rose sharply in quarter two, partly due to the rise in gasoline prices, but factors have also risen this year as supply has tightened. Spot numbers in mid-June were in the $874-930/tonne FOB AR range. Tight supply pushed up the factor to 1.30-1.34 in early June, but it had dropped to 1.23-1.29 mid-month as gasoline prices dipped.
MTBE is produced by reacting isobutene with methanol over a catalyst bed in either a liquid phase or mixed gas-liquid phase reactor. The reaction mixture is distilled to produce high purity MTBE.
MTBE is also obtained as a byproduct from the propylene oxide (PO) process where tert-butyl alcohol is dehydrated to isobutene.
With MTBE's use in gasoline in decline, processes have been developed to convert MTBE units to produce high-octane alkylate products.
Demand for MTBE is set to continue its decline in Europe, but it will be offset by rising consumption in other world regions, such as Asia and the Middle East - where growth will be strongest - and Africa.
Also, players say the financial crisis has slowed down the uptake of more expensive ETBE. Governments are also revising subsidies for biofuels production, which could slow MTBE's fall.
New capacity is being added in Asia, which is undersupplied, with five projects planned in China between 2009-2011. New plants are also being considered in Saudi Arabia, Siberia and India.
|Agip||Gela, ItalySannazarro, Italy||4540|
|Ceska Rafinerska||Kralupy, Czech Republic||90|
|Esso Petroleum||Fawley, UK||125|
|Evonik Oxeno||Antwerp, Belgium
|Fortum Oil and Gas||Porvoo, Finland||115|
|FSK Elemir||Zrenjanin, Serbia||35|
|Hellenic Petroleum||Athens, Greece||70|
|HIP Petrohemija||Pancevo, Serbia||35|
|Hungarian Oil and Gas||Szazhalombatta, Hungary||55|
|Lindsey Oil||Grimsby, UK||100|
Botlek, the Netherlands*
|Mazeikiu Nafta||Mazheikiai, Lithuania||80|
|Motor Oil||Aghii Theodori, Greece||45|
|Petrotel Lukoil||Ploiesti, Romania||45|
|Raffineria di Milazzo||Milazzo, Italy||65|
|Shell & DEA Oil||Wesseling, Germany||65|
|Tiszai Vegyi Kombinat||Tiszaujvaros,Hungary||30|
|Tobolsk Neftekhim||Tobolsk, Russia||70|
|* total ether production|
Source: ICIS plants & projects
Profile last published November 27, 2006
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