EPCA ’10: Natgas constraints temper EG supplies - MEGlobal

04 October 2010 14:21  [Source: ICIS news]

BUDAPEST (ICIS)--Natural gas feedstock constraints this year have prevented many ethylene glycol producers from running at full capacity, an executive with MEGlobal said on Monday.

Speaking on the sidelines of the 44th European Petrochemical Association (EPCA) meeting, Frank Hanraets, vice president commercial of MEGlobal, said a wave of new EG capacity came online in late 2009-early 2010, “ but it has been partially offset by gas constraints from the Middle East and some operational issues”.

Those constraints “are not going to disappear,” he added. As result, many EG plants are not running at capacity.

“What I understand is there is simply not enough gas available at this stage,” Hanreats said.

“What you see is some of the new plants are not running on low-cost [gas] feedstock anymore,” he said. “They are running on liquid feedstock that is not as competitive as gas.”

Combined with growing demand in Asia, the situation has led to market pressure for higher EG prices, he said.

Analyst group Tecnon Orbichem said recently the EG market would be oversupplied by around 3.5m tonnes in 2010 and 2011. That oversupply would fall to less than 3m tonnes by 2012 and below 2m tonnes by 2015, according to the report.

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By: Brian Ford
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