Middle East petchems may target Europe for future exports

24 March 2011 22:17  [Source: ICIS news]

(recasts, clarifying lead)

HOUSTON (ICIS)--Middle Eastern producers will target European markets for future exports as they resolve problems with securing feedstocks, producing ethylene and making derivatives, a US consultant said on Thursday.

In the past decade, the Middle East has added millions of tonnes of capacity, 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.

However, companies finished ethylene crackers before feedstock ethane could be secured, he said.

Other times, the crackers had adequate feedstock supplies, but downstream plants were still incomplete, he said. As a result, the crackers ran at below capacity.

Sometimes, the problems were with starting up the crackers and derivative plants, he said.

Taken together, these problems cost the Middle East several tonnes of effective capacity, Potter said.

However, the Middle East is resolving these problems and will soon search for new markets, he said.

In the past, Middle Eastern producers relied on Asia as a market for exports, he said.

Asia will be unable to absorb the additional production, since so much new capacity will start up in that region, he said. As a result, Middle Eastern producers will turn to Europe.

They will contend with North American producers, another low-cost production region searching for new markets, Potter said. "Places like western Europe will be a battle ground for North America and the Middle East."

The CMAI conference ends on Thursday.

By: Al Greenwood
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