(Clarifies quoted material in seventh paragraph)
DUBAI (ICIS)--Shale gas is a major phenomenon that has shaken the chemical industry in the US, but other feedstocks and industry trends are unfolding as well, Stephen Pryor, the President of ExxonMobil Chemical said on Tuesday.
“Well certainly shale gas has dominated the industry headlines. Shale has given the US producers a major advantage in feedstock and energy cost, but shale is not the first major feedstock development to shake up our industry. It is not the first and it won’t be the last,” Pryor said on the sidelines of the 8th annual Gulf Petrochemicals and Chemicals (GPCA) Forum, which is being held in Dubai on 19-22 November.
“But while shale gas is dominating the headlines there are other feedstocks, other trends, unfolding. One is the growing shortage of refinery based chemical feedstocks because the demand for chemicals is growing faster than the demand for fuels… there are other regional trends like coal-to-olefins in China and there is a shift in the feedstock mix in the Middle East, but shale is the big story,” Pryor said.
Nevertheless, shale gas development in the US will have a global impact, Pryor said.
“Already the US producers are maximising their production of ethane-based chemicals and there is a lot of expansion underway,” Pryor said.
Pryor said chemical demand in the US is growing in the low single digits so most of that capacity will have to be exported.
“The Middle East has had that advantage for a long time so there is now going to be opportunities for both parts of the world and that’s why ExxonMobil is investing in both parts of the world,” he said. “But again, nothing is forever and you can’t just bank on access to feedstock, you need innovation across all parts of your business; your feedstocks, your processes and your products.”
Referring to China, Pryor said that as exports revive the country will revive too.
“China has been the engine of petrochemicals growth for many years and it will continue to remain the centre of demand, there is no question about it,” he said.
“China has slowed down in recent years because, among other things, the export markets have slowed down which has a component of chemicals in them, but as exports revive you are going to see China revive,” he said.
Additional reporting by Nurluqman Suratman