02 April 2012 18:19 [Source: ICIS news]
SAN ANTONIO, Texas (ICIS)--Coal-to-chemical projects in ?xml:namespace>
“The big problem will be logistics because in the case of coal in
He said that coal reserves are mostly located inland of
“If you produce olefins from coal in those places, then you have a very high transportation cost, logistics cost to get [the products] to market. I think this is going to be the constraint,” Hanraets said.
The ethane shortage in the
“You also must absolutely make sure that you have the right economics. The best economics is on the basis of gas at this stage,” Hanraets said, but added that there is no more cheap gas in the
“I think the world needs more glycol for sure but you have to build it at the right place, with the right feedstock,” said Hanraets.
“I think the [MEG] shortage that is going to be there in the next three to five years is serious and new glycol capacity will have to come,” he said.
But so far, the proposed unconventional means, including coal to chemicals, as well as liquid cracking, may prove to be very expensive alternatives for producers, he said.
The advent of shale gas in the
“It will come no doubt, shale gas is there now. But they will need to extract more and more and building a cracker is going to take three to five years [to complete]. I don’t expect them [shale gas-based crackers] to come on stream until between 2016-2017,” Hanraets said.
Tight availability of MEG may see prices breaching $1,500/tonne in the next one to two years, the MEGlobal executive said, citing continued strong demand for the product despite the anticipated economic slowdown.
Global demand for MEG is expected to be about 6% on an annual basis in the next three to five years, Hanraets said.
This is about the 3.3% growth forecast for the world economy in 2012 by the International Monetary Fund.
“It [MEG demand] always outpaced global growth. Because of the nature of its applications, [demand for MEG] will grow faster than [for] all kinds of luxury goods,” Hanraets said.
In 2011, Hanraets said that global consumption of MEG stood at about 23m tonnes. A 6% annual growth is a more subdued growth projection for MEG demand, taking into account the global economic weakness, he said.
“The [MEG demand growth] prediction has always been somewhere between 6-8%. We are slightly more conservative now,” Hanraets said.
China is expected to account for about 48% of the global MEG market this year, with demand exceeding 10m tonnes, he said. This implies that the country's domestic demand for MEG will grow at a more moderate pace of 10% in 2012 compared with a 17-18% growth recorded in 2010, Hanraets said, citing that economic expansion in the world’s second biggest economy is slowing down.
The Chinese government has set a 7.5% GDP target this year after growing at 9.1% pace in 2011, in view of the weakness of its export markets – the US and Europe.
Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC continues through Tuesday.
($1 = €0.75)
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