Shale gas cost advantage to change energy structure - Dow Chemical

24 June 2011 04:30  [Source: ICIS news]

SINGAPORE (ICIS)--Shale gas has become a new energy star in the chemical market because of low electrochemical unit (ECU) margins, a senior executive from Dow Chemical said late on Thursday.

“Shale gas is making the USGC (US Gulf coast) competitively advantaged for low-cost ECUs,” said Carlo Guarino, global business director for Dow’s Chlor Vinyl and Caustic business.

He was speaking at the 15th World Chlor-alkali Conference held in Singapore.

Shale gas has the lowest ECU since 2010, compared with naphtha and coal. One ECU is equivalent to 1 tonne of chlorine and 1.1 tonnes of caustic soda.

“Low-cost ECUs [shale gas] from the USGC will be competitively advantaged for export to Latin America,” Guarino said. “Demand from the Americas will easily absorb the increased North American production, thus the American [US] polyvinyl chloride (PVC) capacities will be structurally short.”

“Chlor-alkali producers in Europe and China are struggling with the impact of higher energy costs on exports,” he added.

The 15th World Chlor-alkali Conference runs from 23-24 June.

Additional reporting by Amanda Zhang

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By: Maggie Zhu

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