09 August 2010 17:16 [Source: ICIS news]
By Nigel Davis
European olefins and polyolefins players are having to rely heavily on integration to see them through this difficult supply-driven period. Significant additional ethylene and polyolefins capacities are coming on-stream in the
The product from them is largely destined for fast-growing markets in Asia but
True, it takes time for new facilities to reach full commercial production: there are engineering and sometimes feedstock and other constraints.
It is also abundantly clear that some units will only come on-stream much later than originally planned.
Companies may be prepared for the worst but are also preparing for a possible future in which overcapacities do not necessarily loom large. There are opportunities to be had, or rather opportunistic moves to make, to take advantage of a developing situation.
INEOS appears to be wanting to take advantage of a period of more readily available deep-sea ethylene to put its crackers and ethylene consuming units in
It plans to build and operate a 1m tonne/year ethylene terminal at its Zwijndrecht facility in
“The operation of the new deep-sea terminal, which is expected to start in 2012, will significantly change the shape of the ethylene market in
The terminal will be connected to the INEOS ethylene consuming plants in the
According to INEOS Oxide CEO Hans Casier, the terminal would secure the competitiveness of the company’s plants in
“The INEOS Group is the largest consumer of ethylene in
“It is also clear the new INEOS Ethylene Terminal will re-shape the ethylene market in
There are five ethylene terminals in
If it were to be built, the INEOS facility would be likely to have spare capacity and possibly open up the prospect of third party access.
This hasn’t been confirmed and is one of the aspects of the project that is being questioned. Another, clearly, is the storage capability of the facility.
It is far from certain that INEOS’s requirements alone would be sufficient to enable efficient operation of the terminal and its storage. The terminal would help raise the competitiveness of the INEOS ethylene chain plants in
INEOS will want to take full advantage of the new facility and is believed to be in talks with Arkema and Total about pipeline connections in
The move highlights the vulnerability of the isolated crackers in
Access to new sources of ethylene in
On paper the
An issue hanging over greater ethylene availability, however, is the apparent shortage of long-haul carriers and the length of time it takes to ship product from the region to northwest
The INEOS facility may not be complete until 2012 but would, if open to third party access, provide a convenient buffer to help European players manage maintenance turnarounds and other shortages more effectively. Shutdowns currently are tightening the market with unplanned events causing further tension.
The investment makes a great deal of sense for a company that has not been able to invest in new ethylene capacity for various reasons. It is better to have the flexibility in a more liquid market and to have the ability to push that liquidity inland.
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