APIC '13: Asia petchems need transformation amid shale revolution

10 May 2013 03:22  [Source: ICIS news]

TAIPEI (ICIS)--Asia's petrochemical players will need to further transform themselves to stay competitive amid the development of low-cost shale gas in North America that will change how the industry works in the near future, senior industry officials said on Friday.

"The shale gas revolution initiated in the US, a major contemporary event, is now reshaping not only the energy industry, but global economy and geopolitics as well," said Yoshimitsu Kobayashi, chairman of the Japanese Petrochemical Industry Association.

The US chemical industry is being renewed on the back of the shale gas revolution, enjoying significant cost competitiveness, both in energy and raw materials, Kobayashi said.

"Affordable natural gas and ethane is giving US manufacturers an advantage over foreign competitors that rely on oil-based raw materials instead of natural gas," said Yusa' Hassan, the president of the Malaysia Petrochemicals Association.

This could cause a "great deal of discomfort" to the Asian petrochemical industry, which is highly dependent on naphtha as a feedstock, according to Kobayashi.

However, the reinvigorated chemical industry in the US should be considered as an opportunity for Asian players and not as a constraint, he said.

The Asian chemical industry should "overhaul and transform ourselves,....of which the battleground should be in the C4 or heavier cut [product lines] and aromatics-based chemicals", he added.

"The supply of low-priced products that are based on coal and shale gas will become a threat to the existing petrochemical industry and will bring a significant change in its structure," said Han-Hong Ban, chairman of the Korea Petrochemical Industry Association (KPIA).

"It is essential for us to respond to such changes in the business environment and to agree that a sustained partnership among member countries is needed," Ban said, referring to the seven member countries of APIC - Japan, India, Singapore, Malaysia, South Korea, Taiwan and Thailand.

The search for more sustainable feedstocks will "continue for a while", said Supachai Watanangura, honorary chairman, Petrochemical Industry Club, The Federation of Thai Industries.

Apart from shale gas, other sources of sustainable feedstock includes coal-to-olefins and bio-based raw materials could be exploited, he said.

However, there is still great uncertainty over the usage of these feedstocks as a mainstay in the industry, Watanangura said.

"Clean, yet immature technologies of unconventional, renewable feedstock either call for staggering investments or are not yet accessible," he said.

"What's more, such technologies have unclear environmental impacts - including emissions and water resources. If we choose this route, we would need extreme patience and investment," Watanangura added.

The industry officials were speaking at the two-day Asian Petrochemical Industry Conference (APIC) in Taipei which ends later on Friday.


By: Nurluqman Suratman



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index