Mideast petchem wave ends as easy ethane runs out - consultant

24 March 2011 21:50  [Source: ICIS news]

HOUSTON (ICIS)--The Middle East has just about tapped out of its readily available supplies of ethane, spelling the end of the wave of giant petrochemical projects, a consultant said on Thursday.

Middle East producers rely heavily on associate gas - so called because it is produced in association with crude oil, said Tony Potter, managing director of the Middle East and India for Chemical Market Associates Inc (CMAI).

Potter made his comments during CMAI's World Petrochemical Conference.

This associate gas readily became feedstock for the wave of petrochemical projects that came on line in the past decade, Potter said.

Instead of burning it off or sending it back into oil wells, the Middle East turned this ethane into chemicals.

Most of the ethane from this associate gas has already been allocated to the new projects, Potter said.

As a result, future investments will be possible only when new sources of feedstock are made available, Potter said.

Although Iraq is still flaring off massive amounts of ethane, the country is too dangerous to attract the money necessary to build petrochemical plants, Potter said.

In all, 2010 marked the last year that saw massive capacity additions in the Middle East, according to CMAI. Additions will continue, but not on the same scale as 2008-2010.

The CMAI conference lasts through Thursday.

For more on olefins visit ICIS chemical intelligence

By: Al Greenwood
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