09 November 2012 04:13 [Source: ICIS news]
By Chow Bee Lin
BANGKOK (ICIS)--Thailand’s petrochemical industry needs to maintain a high level of environmental awareness in order to be at the forefront of competitiveness in the southeast Asian region, a senior industry executive said on Friday.
“If you don’t embrace the environmental co-habitat, even if you’re competitive today, your competitiveness will not be sustainable in the long run,” Siri Jirapongphan, executive director of the Petroleum Institute of Thailand (PTIT), told ICIS.
Thailand is part of the ASEAN (Association of Southeast Asian Nation) economic bloc, which also includes Indonesia, the Philippines, Indonesia, Brunei, Singapore, Laos, Vietnam, Cambodia and Myanmar.
Three years ago, Thai courts invoked Article 67 of the Constitution in suspending more than 70 projects at the country’s petrochemical hub of Map Ta Phut in Rayong, in response to public protests calling for a halt to the projects on environmental grounds.
In spite of more stringent environmental requirements now, new investments in the Thai petrochemical sector are progressing well, as indicated by a recently approved monoethylene glycol (MEG) expansion project, Siri said.
TOC Glycol has started operation at its expanded MEG plant in August this year. The plant’s capacity was raised to 395,000 tonnes/year from 300,000 tonnes/year, he said.
This expansion project that involves ethylene oxide – a hazardous chemical – is a good example of the local industry’s capability to cope with the stringent environmental requirements, he said.
“Being responsive to environmental requirements is a challenge that we embrace totally. We don’t see it as a problem, but as a challenge to do it well,” he added.
TOC Glycol is a wholly owned subsidiary of PTT Global Chemical, the flagship petrochemical firm of Thai oil and gas major PTT.
Thailand’s petrochemical industry is the most competitive player in ASEAN because of its economies of scale and comparative feedstock advantage, with Singapore as its strongest competitor in the sector in terms of size, he said.
Siri said that the petrochemical sectors in Malaysia and Indonesia are much smaller compared with those of their neighbouring countries.
“By all criteria, we’re at least at a par [with], if not better than, the Singaporean petrochemical industry,” said Siri.
The Thai petrochemical industry produces mainly polymers. Its current polymer capacity stands at 8m tonnes/year, which is much larger than Singapore’s, he said.
Thai petrochemical producers have comparative feedstock advantage because around one quarter of their output is derived from natural gas, and more than 80% of the industry’s total requirements for liquefied petroleum gas (LPG), propane, ethane, gas liquids and naphtha are covered locally, he said.
Singapore’s petrochemical industry lacks the feedstock advantage because its production is based on naphtha and imported crude, the PTIT executive said.
A high level of environmental awareness has led the Thai petrochemical sector to explore opportunities in bioplastics and bio-based chemicals, said Siri.
“Thailand is looking at the best access to bio-based raw materials,” he said.
In spite of regional competition, Southeast Asian petrochemical producers will stand to gain from the proposed ASEAN Economic Community (AEC), in which they will be able to help each other in trades, Siri said.
ASEAN member countries aim to form the AEC by 2015 to create a single market and production base that supports equitable economic development in the region, and to transform the region into a highly competitive economic bloc that is fully integrated into the global economy.
In terms of catering to the key Chinese market, ASEAN producers currently play a secondary role to their Middle Eastern counterparts, which export significant volumes of petrochemicals to the northeast Asian country given their huge capacity and feedstock advantage, he said.
But Cambodia, Laos, Myanmar and Vietnam – collectively referred to as ‘CLMV countries’ – offer significant market opportunities for ASEAN petrochemical producers because of their large populations, Siri said.
“ASEAN will be focused on CLMV,” he said.
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