Ethylene demand could support 3-4 new crackers per year: Chevron

12 June 2013 13:06  [Source: ICIS news]

LONDON (ICIS)--World demand growth for ethylene is likely to be sufficient to support the equivalent of three to four new world-scale crackers per year for the next decade, an executive for oil and gas giant Chevron said on Wednesday.

Chevron Phillips Chemical (CPChem) general manager for Europe and Africa Benny Mermans said that the company’s capacity expansion plans at its Baytown and Old Ocean sites in Texas underlines its confidence in the continuing growth of North America’s shale gas sector.

“We estimate that global demand growth for ethylene over the next 10 years could support the equivalent of three to four new world-scale crackers per year, and we believe the development of shale energy resources around the world will also catalyze new investments in petrochemicals and plastics,” said Mermans at the Global Petrochemical Conference in Frankfurt, Germany.

The company has applied to build a 1.5m tonne ethane cracker at its Baytown site, and to construct two 500,000 tonne/year polyethylene units at its Old Ocean facility.

Mermans said that European petrochemical companies must innovate to expand their portfolios of specialty chemicals if they wish to remain competitive in light of sluggish demand and shrinking margins.

“Focusing on innovation is even more important in light of the prolonged economic crisis which continues to impact demand and margins in much of Europe,” he said.

“The mega complexes being built today will likely have difficulty effectively competing in this highly specialised area,” he added.

Mermans noted that the threat of reduced European competitiveness was being increased by the shale gas boom in North America, adding that governments should move to establish the regulatory and infrastructural frameworks to allow extraction to begin as soon as possible.

He said: “The challenges that must be overcome to fully develop these resources in Europe include land access, regulatory hurdles, infrastructure development, and continued development of drilling and completion technologies.

“To get access to competitive feedstock within its borders, European producers must encourage development of European energy resources, creating an environment of plentiful gas supply. This would take substantial cooperation and development,” he added.

The company is expanding operations at its Tessenderlo, Belgium, plant by adding the capacity to manufacture sulphur-based organic products, Mermans added.

By: Tom Brown
+44 208 652 3214

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