22 April 2010 07:29 [Source: ICIS news]
(Recasts lead and clarifies interviewee's job title.)
By Chow Bee Lin
SHANGHAI (ICIS news)--US polyethylene (PE) exports to Asia may not increase markedly in the long term as the natural gas feedstock advantage that the US has been enjoying for the past two years cannot be guaranteed, a senior executive with ExxonMobil Chemical said on Thursday.
The recent increase in natural gas output in the ?xml:namespace>
Wojnar was speaking on the sidelines of the Chinaplas exhibition in Shanghai.
Industry sources in Asia said there have been hopes in the region about cheaper PE shipments from the
The US exported 911,437 tonnes of PE to
However, ExxonMobil Chemical's Wojnar said that it was not clear if the gas feedstock advantage would last long, because there were other applications for the gas, including use in power generation and in the production of feedstocks for other chemicals such as fertilizers and methanol.
"Much of the gas you speak of is going to go into natural gas applications, and it’s still an open question how much ethane is in the gas,” said Wojnar, referring to how much ethane could be extracted from the natural gas.
A wide gap between US prices for oil and natural gas last year had put US producers into a lower cost structure than their naphtha-based counterparts in Europe and
The American Gas Association (AGA) reported earlier this month that the highest level of domestic known reserves of natural gas in the
ExxonMobil Chemical was not too concerned about the future feedstock environment in the
"The way that we tend to approach this is rather than say we need a gas advantage to be able to export, we want to put in feedstock flexibility so that we've that advantage all the time,” he said.
“Whether it’s a liquid-favoured or gas-favoured environment, we like to be able to build our facilities so that they can be competitive in their regions and globally.
"We don’t tend to project if there’s going to be an ethane advantage. We try to test our decisions against a range of scenarios where ethane could be an advantage, or it could be a disadvantage, like it was in the middle part of the past decade,” he said.
Asian PE buyers are always looking out for US material, as it is typically priced more competitively compared with Asian material due to the longer shipment time from the US, traders said.
Increased natural gas output in the US in the past two years coupled with the recent fall in US natural gas prices had led many buyers in Asia to pin their hopes on getting more PE from the US in the future, they said.
Chinaplas 2010 is an international exhibition of the plastics and rubber industries that runs from 19-22 April.
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