Ethylene consumption seen doubling by 2015

Global ethylene consumption predictions [110370 bytes]

Global ethylene consumption is expected to almost double by 2015.

That expansion, according to a worldwide petrochemical feedstock study by Chemical Market Associates Inc., Houston, and Purvin & Gertz Inc., Dallas, is due in large part to rapid demand growth in Asia.

The study foresees an average growth rate of about 4.8%/year during the 10 years beginning in 1995, slowing to 3.7%/year in the 10-year period after that.

Considerable further investment will be needed in olefins plants to meet this demand, the study found.

Ethylene

The companies conclude that naphtha will maintain its role as the dominant ethylene feedstock-50-55% of ethylene produced-with considerable variations among countries and regions.

Ethylene growth will outpace growth in natural gas liquids supply, so heavy liquids will be needed.

Increasing volumes of ethane will be used for future ethylene production, but the potential supply of ethane greatly exceeds current ethane recovery rates, the study notes.

The rapid increase in condensate production will contribute to feedstock supplies directly and indirectly, but refinery production of naphtha will have to expand to close the balance.

Propylene

Driven by the strength in the polypropylene market, demand growth for propylene is even higher than for ethylene, the study says.

Global propylene demand was about 39 million tons in 1995, and the study forecasts an increase to almost 90 million tons by 2015.

Based on the projected feedstock slate, the propylene supply/demand balance will be tight but manageable without widespread investment in "on-purpose" production.

Most of the propylene will be coproduced in ethylene complexes, but more propylene recovery from refineries will be required.

In some parts of the world, some fluid catalytic cracking projects will be tailored to maximize propylene recovery. In selected instances, propane dehydrogenation will be used to augment propylene balance.

But, in general, this will be a less cost-effective source of propylene, and operators won't earn an adequate investment return, the study points out.

Aromatics

Similar to olefins, there is strong growth projected for aromatics demand. Demand for benzene has nearly doubled the past 15 years. Steady growth is expected for the forecast period.

Volume growth in benzene demand during 1995-2005 is expected to reach 12.5 million tons. Also during that time, coproduced benzene will increase by 14.2 million tons.

Demand for paraxylene and orthoxylene is expected to grow at a higher rate than benzene demand.

Explosive growth that polyester markets enjoyed during the past 10 years has had a dramatic effect on the markets for paraxylene and mixed xylenes. Paraxylene demand growth is expected to drop only to less than 5%/year on a world basis after 2010.

Overall mixed xylene demand will grow to 50 million tons by 2015 from 18.5 million tons in 1995, the study predicts.

Benzene supply will grow from two sources during the forecast period. The rapid buildup in heavy liquids olefins crackers will significantly increase the volume of pyrolysis gasoline from which benzene will be extracted.

Also, the strong growth in end-use markets for polyester/polyethylene terephthalate will cause large investments to be made in aromatics complexes to produce paraxylene, and benzene coproduct from this route also will increase rapidly.

Paraxylene demand is forecast to grow at a higher rate than benzene demand. The study says the way in which the benzene market will be balanced in the medium term is through the closure of many on-purpose hydrodealkylation units worldwide.

Methanol

As natural gas reserves are exploited to supply cleaner burning fuel, the study says, more natural gas supply will become available for methanol manufacture in many regions and countries where it wasn't previously available for that purpose.

However, after several years of strong demand growth stemming from the surge in methyl tertiary butyl ether use in the U.S., methanol demand growth rates will slow for the foreseeable future.

More than enough supplies of gas will be available, the study adds, and opportunities to add low-cost methanol capacity will continue to appear. Widespread additional low-production-cost investments would certainly make methanol production from heavy liquids less economic and could result in further industry rationalization.

Countering this argument, to some extent, methanol has high potential price-driven demand elasticity. Prolonged low prices could result in exploitation of new methanol uses and boost demand considerably.