AFPM ’12: Iran petchem sanctions to be 2012 olefins game changer

01 April 2012 21:53  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--The petrochemical trade sanctions imposed on Iran by the US and its allies will be the 2012 game changer in the global olefins markets, an olefins trader said on Sunday.

“Much has been made of the shale gas phenomenon, but for this year the interesting aspect is the sanctions and the impact [on the ethylene market],” the trader said on the sidelines of the International Petrochemical Conference (IPC).

“Not one ethylene carrier will take ethylene from Iran,” the trader said, adding that product flows would change.

Ship owners have found it increasingly difficult to secure the necessary insurance because US and European banks wish to avoid US trade violation policies.

Last month, there were unconfirmed reports that Turkey, a regular importer of Iranian ethylene, was unable to take delivery of Iranian volumes because of the shipping restriction. Sources said Turkey viewed itself as a “bridge” between Europe and Iran.

There is ongoing speculation over how this will affect INEOS’s new ethylene terminal at Antwerp in Belgium, which is due to be operational by 2013.

The terminal will allow INEOS, a major consumer of ethylene, to take advantage of deep-sea ethylene from the Middle East.

“It’s a big tank built on the basis of cheap ethylene” the trader said.

With Iranian volumes out of the equation, it will be difficult to determine the impact on deep-sea availability and pricing.

The 1m tonne/year facility has been under construction for around 15 months and will feed INEOS’s ethylene oxide (EO) plant at Zwijndrecht, Belgium, and also link to Europe’s ARG pipeline. The project was unveiled in July 2010 and was also dubbed a “game changer”.

The US announced in November 2011 that it would tighten sanctions on Iran over suspicions in the west that the country is developing nuclear weapons.

($1 = €0.75)


By: Nel Weddle
+44 20 8652 3214



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