27 August 2013 17:35 [Source: ICIS news]
By Jeremy Pafford
Ethane, naphtha’s main petrochemical feedstock replacement, is plentiful in light of the shale revolution, and its spot prices were at 24.88 cents/gal on Tuesday morning.
For naphtha to be considered as a feedstock replacement for ethane, the natural gas liquid (NGL) would have to jump more than fivefold to about $1.29/gal, said Peter Fasullo, principal at En*Vantage, an investment and consulting firm.
With so much natural gas production coming on stream, that scenario is not likely in the foreseeable future, he said. Likewise, “there’s no way naphtha can stoop” down to ethane’s cost level, he said.
Naphtha is one of the products created in the distillation of crude oil. The main uses of naphtha are in steam cracking to make olefins, in reforming to make aromatics and as a feedstock for high-octane gasoline. It also can be used as a solvent.
US Gulf spot prices for naphtha N+A fluctuate in tandem with unleaded gasoline prices and were recently assessed by ICIS at $978.75-982.32/tonne (€734.06-736.74/tonne)
The need to distill crude oil will continue far into the future in the US, but the days of naphtha as an olefin feedstock have passed, and the product’s future in the realm of gasoline production is waning as gasoline consumption continues to decrease, Fasullo said.
In most regions of the world, naphtha remains the feedstock of choice for ethylene production, but that will decrease as the host of planned ethane crackers planned for the
Naphtha may still have a future in the
“I think what will happen is that we have to become an exporter,” he said. “It may be used by refineries elsewhere.
“I think if Keystone is approved and you get that down here [to the
Until then, naphtha’s role in the petrochemical chain continues to wither.
“It’s not in the equation for the future,” Fasullo said. “It’s going to have to find other outlets.”
($1 = €0.75)
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