InterviewNPRA '11: World needs 1.5m tonne annual MEG capacity rise

28 March 2011 23:04  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--The world requires an annual increase in monoethylene glycol (MEG) capacity of 1.5m tonnes to meet current strong demand, but a shortage of ethane feedstock deters expansion, said an executive at a major producer on Monday.

“You would need to build two world-scale plants every year and a world-scale plant is 700,000–800,000 tonnes, so you need 1.5m tonnes a year of glycol and nothing is coming. That’s scary,” MEGlobal vice president for commercial operations Frank Hanraets said on the sidelines of the International Petrochemical Conference (IPC).

Global demand is expected to continue growing at around 7%, while demand from China and India will likely be in the double digits, Hanraets said.

China's demand in 2011 is expected to be as good as the 17% growth recorded in 2010, and India should also post a double-digit growth in demand.

China’s MEG consumption last year – at more than 9m tonnes – accounts for 43% of global demand, he said.

The tight MEG supply in the world market will likely last three to five years since producers are constrained from building new plants, he said.

"We are looking at all options [to expand]. It's a matter of where you can find the feedstock," Hanraets said.

MEGlobal currently produces more than 1m tonnes/year of MEG at its three production plants in Canada and markets more than 3.5m tonnes of the product from its supply partrners, according to its website.

Hosted by the National Petrochemical & Refiners Association (NPRA), the IPC continues through Tuesday.

For more on monoethylene glycol visit ICIS chemical intelligence

By: Pearl Bantillo
+65 6780 4359

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