Petrochemical
industry plays a major role in our daily life. Almost everything that we are
dependent nowadays are made from petrochemicals be it plastics, clothes, home
appliances etc. Being a professional chemical engineer, one needs to keep
up-to-date with fast changing petrochemical industry especially when new
processes for new products, new chemicals are invented everyday.
Wednesday, January 30, 2008
Petrochemical Technology: Indonesia Follows Brazils Lead in Ethanol
Indonesia is eyeing on developing a similar biofuels programme as Brazil's ethanol technology. Talks between two countries are looking at technology exchange for FFV (flexible fuel vehicle) which runs on gasoline or 100% ethanol.
With rising concern of shortage fuel and energy hikes, biofuels and ethanol is becoming more feasible to replace gasoline shortage.
Rentech is expecting its first pilot plant for a coal gasification production facility to be completed and start production in Spring 2008. The coal gasification plant is located in the Commerce City, Colorada near Denver to produce synthetic diesel and aviation fuels from natural gas, coal and also biomass.
America is critically looking into other sources of energy fuels and extensively developing its biofuels business.
Petrochemical Technology: New Acrylic Acid Process Route
US biofuels player and ethanol producer Cargill is in the collaboration with Novozymes to develop a new breakthrough technology that would create acrylic acid through 3-hydroxypropionic acid (3HPA) using sugar. Engineered biological micro-organisms will be used to make 3HPA from fermented sugar. Bio-organisms have known to have high efficiency in breaking down strong chemical bonds. The 3HPA is then used for acrylic acid production.
Due to the innovative biotechnology that would be involved, the project is granted $1.5 million from the US Department of Energy. The collaborating partners expecting the technology to be available within five years, which Cargill and Novozymes will license the technology. Capacity for pilot petrochemical plant has not yet been finalized.
Petrochemical Plant: Saudi Arabia Epoxy Project Almost Complete
Saudi Arabia's 60 ktpa epoxy resin capacity project is near completion with its EPCC (Engineering, procurement and construction) work has reached 99% with overall works of 86%. The epoxy resins plant is owned by Nama Chemicals. The epoxy petrochemical complex will produce epoxy resins as well as epichlorohydrin, caustic coda and calcium chloride. The whole project is expected to be completed in April 2008.
Nama Chemicals already owned a 50 ktpa capacity high quality caustic soda prills utilizing Switzerland Bertrams technology operated by Arabian Alkali Company (SODA). SODA receives the caustic soda lye as feedstock through SABIC affiliate Saudi Petrochemial Co (Sadaf).
The project is in-line with Arab Saudi government direction to increase petrochemical products development in the country.
Twin Rivers Technologies (TRT), a US oleochemicals, natural ingredients and biofuels business producer is in the midst of building an oilseed facility in Quebec Canada for a total cost of $150 million.
The oilseed plant will have a capacity of 1000 ktpa in the Becancour industrial park to crush and refine canola seeds, soybeans and refining palm oil for food application. The capacity includes co-product of protein meal which will be used for the animal feed industry.
Construction is expected to start in February 2008 with comissioning date targeted for end 2009. The oilseed facility would be able to generate sales of $450 million per year and potentially creating almost 100 jobs in Becancour.
Hubei Yihua Chemical, a Chinese fertilizer maker, has planned to invest in a fertilizer petrochemical plant in an Inner Mongolia project. The cost of investment Hubei Yihua would join in is for $70 mil.
The $70 will make the Hubei Yinhua a 51% stake holder from Erdos Union Chemical which plans to build the 600 ktpa fertilizer plant of ammonia and a 1040 ktpa of urea for the cost of CNY3billion expected to start construction in quarter four 2008.
Petrochemical Disaster: Dimethyl Silicone Factory Exploded in China
A dimethyl silicone factory used for cosmetics at Boyang Chemical exploded killing four people in the blast. The dimethyl silicone production facility, adjacent to two other plants producing activated carbon and zinc chloride is located in Wuyi Country, Zhejiang claimed a life of the company's assistant General Manager and three other workers.
It took the local Chinese fire department three hours to put down the fire.
Petrochemical Technology: LyondellBasell Technology Used for PetroChina Polypropylene Plant
PetroChina has decided to use LyondellBasell process technology for its recent project of a new 300 ktpa polypropylene (PP) plant for the Daqing Refinery-Petchem integration which is expected to be completed in the Heilongjiang province by 2010. They have chosen to use LyondellBasell Spherizone technology, previously owned by Basell.
PetroChina has a history of subscribing to LyondellBasell polyolefin technology and if materialises, this would be PetroChina's ninth polyolefin licence from LyondellBasell.
A 600 ktpa methanol plant in Russia in the Urals area is planned by the Russian gas trader Itera and resins producer Uralkhimplast expecting to be due on stream in 2010 with an estimated cost of construction for the whole project to be in the region of $400 million.
This is shortly after both of Itera and Uralkhimplast original announcement of a 400ktpa methanol unit.
Petrochemical Conference: 5th Phenol/Acetone Market in Singapore
"Tacking Supply issues amid high growth"
Its about one month to our upcoming 5th Phenol / Acetone and Derivatives Market, 27 -28th Feb 2008 in Singapore, and already we have more than 90 delegate participation. As we anticipate an even better turn up compared to last year's, we urge you to register now to reserve your seats.
Confirmed speaker as of today
·Lummus Technology,
·Nexant Thailand Ltd.
·SI Group - India Ltd
·Chemical Market Associates Inc
·Mitsui & Co (Shanghai) Ltd
·Petrochem Middle East
·Hexion Specialty Chemicals
·Kumho P&B Chemicals
·Robert Eller Associates Inc
·Vopak
·SI Group
·Mitsui Phenols
·Beijing Yanshan Petrochemical Co Ltd
·Shandong Shengquan Chemical Co, Ltd
·Akin Chemicals
·Union Petrochemical PLC
Sulzer Chemtech Pte Ltd
Register Now with your team to enjoy attractive group savings of up to USD900
Petrochemical Outlook 2008: US Petchem Industry Looking Gloomy Due to Recession
Everyone is talking about it, the US subprime crisis and the recession that is coming in 2008. The recession means less demand and US petchem industry is likely to suffer and be dependent totally on export.
The US housing market seems to have a high bearing on the economy and most business and economic analysts are in tandem with a conclusion that there will be a recession at least in the US in 2008 and this includes the chief of the American Chemistry Council (ACC).
Since end users of petrochemical products include those of housing and construction where most downstream chemicals products such as adhesives, insulation, synthetics, PVCs, paints and coatings, roofing and other materials are consumed, the impact could be significant on the petchem outlook for the US.
It was estimated that an average house in the US consume $15000 of chemicals and there has yet to be any sign of the end of the bearish scenario.
However, the scenario is quite different with the export markets with countries elsewhere are seeing booming in the petrochemical sector especially when the dollar is weak against all major currencies.
In fact, major market analysts such as Nexant has indicated that the US polyolefins plant margin is likely to be on the high side in 2008. The operating rates are going to be high with better margins. With tight polypropylene (PP) market outlook for US in 2008, there will be a boost of demand for export polystyrene.
Bauman maintained Nexant's outlook for PS because the US now has fewer producers due to joint ventures, which should create more pricing discipline. INEOS NOVA has already reduced their polystyrene capacity which could further increase price hike for high demand polystyrene.
However, one chemical product that gets unlucky for 2008 would be polyethylene terephthalate (PET) since overcapacity is forecasted, reducing plant production margin and lower price.
Petrochemical Outlook 2008: Russia Expanding Petrochemicals
Lets have a look at Russia petchem industry outlook in 2008, the long and short of it.
Currently, Russia is one of the most prominent world leading oil and gas producers due to its high reserve in the country. Russia holds the biggest gas reserve in the world but more than half of its plastics and petrochemical products are imported. 2008 will look into a change in this and potentially become the biggest petrochemical producer in the world.
Russia is planning to raise the overall production of chemicals and petrochemicals by 40% by 2015 at a whopping $163 billion. The plan will comprise of 800 new petrochemical plants expansion and emplyment of 750,000 people.
Moscow wants the country's hydrocarbon molecules to be processed domestically, setting the new direction for the country's petchem industry.
Dow Chemical has signed a memorandum of intentions (MoI) with Gazprom and Sibur to study joint gas processing projects in Russia's Yamalo-Nenets Autonomous Region.
Gazprom and BASF offshoot Wintershall formed a joint gas trading firm, Russian-registered Gazprom YRGM Trading, to buy gas from the Yuzhno-Russky gas deposit in the Yamalo-Nenets Region.
Russia's Yamalo-Nenets Autonomous Region will be producing 25bn cubic metres/year of gas from 2009. Gazprom will raise its natural gas market share in Europe to 33% in 2015.
President Vladimir Putin has urged development of the country's refining and petrochemical sectors instead of importing petrochemical products.
Gazprom would raise ethylene production up to 7.66m tonnes/year, up three-and-a-half times from now, while plastics production would rise up to 1.7m tonnes/year by 2015.
Astrakhangazprom (AGP) announced plans to build a gas-chemical complex, including 300,000 tonne/year of PP and 150,000 tonne/year of polyethylene (PE) facilities.
The following year Gazprom's petrochemical subsidiary Sibur renewed plans to build facilities with nameplate capacity of up to 900,000 tonnes /year of polypropylene (PP) and up to 500,000 tonnes/year of PE in Tobolsk.
$1.3bn production facilities are expected to be built at Tobolsk-Neftekhim. The construction is tentatively expected to start in May 2008 and be completed by 2010-2011.
RusVinyl is building a 330,000 tonne/year PVC plant in the Nizhny Novgorod due on stream in 2010.
LUKoil subsidiary LUKoil-Neftekhim plans to build a $3.5bn petrochemical hub in Southern Russia.
Despite all these, Russia's biggest problem remains that of slow materialisation of projects, mostly due to low investment in the country. Russia’s petrochemical sector is yet to develop sufficient capacities to become the world superpower in petrochemical products to the world market, but the tendency for the future years would be in that direction.
Colombia Polyethylene (PE) producer Ecopetrol is expanding its business portfolio towards Polypropylene (PP) by acquiring Columbia's PP producer Propilco for $690 deal. If successful, Ecopetrol will be the sole producer of polyetheylene and polypropylene in Columbia.
Business analysts is expecting that the acquisition will boost the company's earnings as it would have an enormous strategic value for Ecopetrol since its upstream synergies in exploration, production, refining can be channeled down to the rest of the petrochemical chain. Ecopetrol inevitably will be the largest petrochemical company in Columbia after the acquisition.
Petrochemical Plant Disaster: T2 Labaratories Explosion in Florida
A petrochemical plant producing methylcyclopentadienyl manganese tricarbonyl as a gasoline additive for octane boosting had an LTI (loss time injury) that had killed four people in a fatal chemical explosion in Florida.
The chemical reactor had ruptured according to federal investigation at the T2 Labaratories plant in Jacksonville. The impact of the explosion had flown away the reactor's top head a quarter mile or about 400 meters away from the plant.
United States has banned MTBE as gasoline blending and petrochemical producers in the country have begun to use alternatives for much sought blending components.
Join CMAI for the 2008 World Petrochemical Conference and hear the latest views and forecasts from industry representatives and CMAI consultants. Complementing the conference, CMAI will host two one-day workshops immediately preceding the conference on March 25, 2008. The 23rd Annual World Petrochemical Conference will highlight Keynote Speaker Volker Trautz, President & Chief Executive Officer, LyondellBasell, The Netherlands. On the first day, the popular General Session will focus on the critical macro issues for the chemicals, plastics and fiber industries. Further defining the outlook for major chemical industry sectors, day two will include concurrent sessions for Aromatics & Fiber Intermediates, Olefins & Polyolefins and Chlor-Alkali & Related Products.
Petrochemical News: Impact of Increasing Oil Towards Oil & Gas Companies
The recent hike of oil price has major impacts on oil & gas companies worldwide. Schlumberger has announced a strong net rise of 22% amidst the global economic crisis.
It looks as if, the earnings and revenue from the United States operations were dropping but this has been strongly overcome by the strong international growth where demand is skyrocketing especially coming from the Middle East, China, India and Africa.
This could very well be the starting point of US recession but would be the first time in history where the recession wouldn't bring much impact towards the rising economy power in other areas in the globe. The demand shifting is happening from the US towards new booming economies of Asia and the Middle East.
However, the ripple effect of hiking oil price is having less and less effect towards petrochemical products. More and more petrochemical companies are struggling to cope with high cost of feedstock and diminishing margin. That however was the case in the past years and 2007. With oil becoming stable at US$100, the end customers are beginning to adapt, boosting petrochemical product prices. This is helped alot by the incoming petrochemical plant capacity in the Middle East as well as to create balance between increasing demand and hiking price of petrochemical products with increasing supply of feedstock form the Middle East.
Petrochemical News: Tullow Oil Selling Pakistan Oil & Gas Investments
Following the recent assassination of Pakistan Prime Minister's Benazir Bhutto, another Oil & Gas company, Tullow Oil PLC is preparing to sell its oil and natural gas operations in Pakistan. The investments for sale include two producing gas fields covering a range of exploration, development and production activities inadvertently indicating the recent instability in Pakistan.
The news came as a shock since Tullow is fairly established in oil and gas activities in Pakistan which starts in early 1991.
Speculations are also in the air that Tullow had decided to exit Pakistan even before the Bhutto's assassination due to the political instability of Pakistan. One of the major factors is the growing restrictions to conduct business where Tullow had been unable to continue working on five exploratory wells in Balochistan due to the current law and order situation.
Tullow's assets in Pakistan include a 75% stake in the Chachar 25 million cubic feet per day natural gas field in the Middle Indus region, 38% of Sara Suri field producing 400 barrels a day and exploration licenses encompassing a 1,107 square kilometer Kohat block with a prospect of 50 million barrels of oil.
Business analysts are predicting the selling of Pakistan assets due to Tullow's recent discovery of light oil in Ghana and eventually would enlarging its dominance in Africa.
Petrochemical News: Shell & BP Looking for Investments in China
Tug of war between two oil and gas giants, Shell and BP seems inevitable. Recently, BP was shortlisted to participate in a refinery project in Guangzhou China in collaboration with Sinopec and Kuwait Petroleum Corporation (KPC). The refinery project is in the capacity of 15 million tonnes per annum of refinery products. The project also consists of 1 mil tpa of ehtylene unit with investment worth of more than US$5 billion.
Royal Dutch Shell has previously signed a US$4.3 billion investment with China National Offshore Oil Corporation (CNOOC) in the Guangdong Province for production of 350,000 bpd of crude oil.
Both oil and gas majors are actively seeking downstream oil projects in China. BP currently acquires 9.4% of the shares of China's largest refining and petrochemical company, Sinopec's Zhenhai Petrochemical Company. Shell holds 50% of the shares in the 800,000 tpa ethylene unit at CNOOC-Shell Petrochemical Company in Huizhou.
Petrochemical Deals: Malaysia and Iran Signed Agreement on Golshan & Ferdowsi Fields Development Contract
The Iranian government had signed an agreement with the Malaysian authority to jointly develop the Golshan and Ferdowsi gas fields in Iran. The two ministers, Iranian Oil Minister Gholamhossein Nozari and Malaysian Ambassador Monshe Afdzaruddin made the what possibly could be multi billion dollar deals on January 15th 2008.
The deal was between two companies National Iranian Oil Company (NIOC) and Malaysia's Al-Bukhari Foundation. The MoU (Memorandum of Understanding) worth US$16 billion for the gas fields will be developed by SKS Ventures of Al-Bukhari Foundation for LNG production units.
Golshan field holds 42 to 56 trillion cubic feet (tcf) of in-place gas while the Ferdowsi field has estimated in situ gas reserves of 9 to 13 10 tcf. Iran is the world's second-largest after Russia, amount to 971.150 tcf (more than 26 tcm). The country is progressively looking at partners and foreign investment to develop its gas fields both to cover domestic consumption and fulfill its gas export plans for Europe and Eastern Asia.
Petrochemical News: Malaysia to Spend RM35 Billion on Oil Subsidy
The Malaysian government is expected to spend over RM35 billion in subsidy for gasoline fuel in the country if oil price is to hover around US$100. Asian countries are well-known for providing oil subsidies but as oil prices becoming too expensive with energy prices booming everywhere, it is unlikely for any of the governments to provide full subsidy as high as before. Read the Asian countries oil subsidy news and forecast here.
The Malaysian government however said that the budget deficit does not impact on how the government would spend to boost the nation's GDP growth. Malaysian analysts expecting around 5% GDP growth for 2008.
There are just a few weeks left to register for EPC's trio of technology events in Prague.
These events will bring together a truly International audience. Companies attending to date are listed below.
AFTC: Latest Technologies for Production andBlendingof Biofuels
With the European Directive targeting a 5.75% biofuel content in diesel and motor fuel pools by 2010, it is now more vital than ever to resolve all technical issues to improve efficiency of the production of biofuels and answer the questions relating to the blending of biofuels into the refinery gasoline pools and diesel pools.
AFTC will tackle these issues head on with contributions from leading specialists in biofuel technology such as Neste Jacobs,UOP and CDTech as well as feature presentations from operating companies such as Česká rafinérská and Indian Oil Corporation Limited (IOCL)
ICTC: THE Forum for Important Developments in Catalyst Technology and Catalyst Management
Latest Catalyst developments for Clean Fuelsincluding Hydroprocessing, Isomerisation, Reforming, FCC and Hydrocracking .
Česká rafinérská will describe the processing of Unocal hydrocracker feedstock in the Litvinov refinery, while Reliance will provide an overview of the Indian refining market and their current projects. NIS Refinery Pancevo will discuss the challenges to meet new product requirements and Indian Oil will discussthe selection of best catalyst and additive for their FCC unit.
Plus much more - and Free Site Visit to the Kralupy Refinery
IPGC: 10thAnniversary Meeting
Unipetrol to Host the Gala Cocktail Reception
Already in its 10th year IPGC, will address the many diverse challenges facing the petrochemical industry by assessing the markets and presenting the technology innovations that are crucial to its continued success.
End-users presenting at this event include Unipetrol, TVK, Petkim and Sinopec, whilst key technology companies such as SABTEC, CRI Catalyst Company, UOP , AXENS and Technip will be presenting about latest developments in Olefins, Polyolefins and Aromatics. Nexant Chem Systems will provide an enlightening overview of the markets for petrochemicals and the evolving political and commercial strategies.
Petrochemical Outlook 2008: Bhutto Assasination and Pakistan Petchem Industry Risk Assessment
The recent assassination of former Benazir Bhutto in Pakistan is likely to slow down foreign investment in Pakistan due to the political instability. Analysts, however is confident that the impact would be temporary with risk period to be around two quarters or 6 months period.
The death of Pakistan's beloved former prime minister, Benazir Bhutto had somehow impacted the financial development which is needed for more petrochemical investements in new plants addition, petchem deals and also to cater for stable production of petrochemical products in the company.
Pakistan economy is now in the shadow of its impressive performance in 2007 of 7% GDP growth and the government is expected to at least maintain that number in 2008 amidst of the killing of Benazir Bhutto.
However, looking at the country's petchem situation, Pakistan lacks any major petrochemical projects at the moment, neither does it have major petrochemical plants that could seriously impacted the local demand and/or foreign investments apart of some major petrochemical sector projects under development such as Engro Asahi. Engro Asahi plans to set up a chlor-alkali complex in Pakistan expected to be completed by third quarter of 2008. Another project is Engro Chemical which is working closely with Haldor-Topsoe, a Denmark company for development of catalyst for a new 2,200 tonne/day ammonia plant in Daharki, Pakistan. The ammonia produced will be used to manufacture urea at the facility which is expected to come on stream by March 2010.. Business analysts confidence remain on the high side that Pakistan's pethecm industry outlook in 2008 would be in the region of the same as of the global economy in the Eastern world where projected demand is high.
Petrochemical outlook for 2008 polystyrene (PS) looks rather interesting with market trend is expecting to see Middle East polystyrene to be bullish with a lot of new capacity expansion for polystyrene chemical plants to be built at the expense of the South Asia Market.
Price for Polystyrene likely to remain strong and high due to tight supply in Middle East, with a different scenario in South Asia. Polystyrene outlook in M.East will grow around 4% especially in specialty chemicals from PS base including the traditional electronics, food and beverage packaging.
Styrene costs however, will stay high in 2008, making new plant capacity expansion to be difficult especially outside the Middle East due to low margin, where cheap feedstock is not available.
Limited availability and strong demand within the Gulf Cooperation Council (GCC) region prompted a major Saudi Arabian supplier to cater mainly to the GCC and significantly cut its export volumes to the East Mediterranean (East Med) market this year.
Major PS producers in the Middle East including Saudi Basic Industries Corp (SABIC), Iran’s Tabriz Petrochemical and in South Asian producers of Supreme Petchem, LG Polymers, Pushpa Polymers and Pak Petrochemical Industries (PPI) are foreseeing higher price in polystyrene overall due to limited supply.
SABIC is already planning to shut down its 175 ktpa capacity Polystyrene plant in Al Jubail, Saudi Arabia, for turnaround which will give big impact in short supply of global Polystyrene.
Petrochemical Environment: China Joins the World for Carbon Reduction
Unlike some of the developed countries who disregard the importance of working together for carbon emission reduction, China plans to reduce emission levels by 10% between 2006 and 2010. 10% is considered as a big number for carbon emission reduction especially for a country that is developing at a rapid pace. China's use of renewable fuels would be expected at 15% by the year 2020, predicted by the National Development and Reform Commission (NDRC).
To achieve this, analysts are expecting some tighter automobile standards to reduce carbon emissions from cars, and to encourage the research and development of hybrid and environmentally friendly cars.
China has achieved almost 2% carbon reduction last year from law enforcement and economic incentives alone. However, the country's biggest concern is still on the table: China's heavy dependency on oil and gas for expansion of growth. China domestic supplies of fossil fuels such as coal is high, however that is most likely due to low access and per-capita use of these fuels across the nation. The country has no choice but to join the wagon of oil diggers to develop sources of crude oil in the nation, even though costs associated with exploring oil is extremely high at present.
Petrochemical Conference: Bahrain's 5th Phenol/ Acetone and Derivatives Market
"Tacking Supply issues amid high growth"
Over the past year, high materials prices (benzene & propylene) have put a margin squeeze on the industry. Strong energy prices and demand growth have also created tightness in feedstock markets - Will the emergence of new production technologies providing alternative sources of feedstock improve the situation?
CMT's 4th Phenol conference held last year in Shanghai was a great success attended by more than 130 industry practitioners! Join CMT’s 5th Phenol / Acetone and Derivatives Market, 27 -28th Feb 2008 in Singapore with our speaker panelist to discuss and explore the following topics
Global Phenol/Acetone, Market Development
Global Cumene Balance
Phenol Raw materials overview
Dynamism of Phenol Acetone trade in China/ Asia
Phenol/Acetone Trade in the Middle East
Phenol Production flexibility- controlling Acetone imbalance
Epoxy markets Development
BPA – remaining competitive Amid rising capacities in Asia
View & prospects of polycarbonate industry
Storage & logistical challenges for phenol/acetone
Strength, growth and challenges of phenol chain business
Phenolic resin markets in china
MMA growth in Asia
Phenol/Acetone market Development in India
Solvent Market Development
Optimization of cumene/ phenol complex with advanced mass transfer technology
Some of the confirmed Speaker Panel include: Lummus Technology, Nexant, CMAI, Mitsui & Co, SI Group India, Petrochem Middle East, Kumho P&B Chemicals, Vopak, Sulzer Chemtech, Hexion Specialty Chemicals, Shandong Shengquan Chemical Co, Mitsui Phenols , Akin Chemical/ Tradechem and moreRegister Now with your team to enjoy attractive group savings of up to USD900
If you need any additional information about the conference do feel free to contact me at grace@cmtsp.com.sg and Tel: 65 6346 9147 at your convenience
Petrochemical News: Egypt, Jordan & Syria Signed Gas Pipeling Agreement
An agreement of what could be seen as more than just economic ties has been signed between Egypt, Jordan & Syria for a gas pipeline that will extend the current Arab Gas Grid pipeline to as far as Turkey.
This deal will ultimately being a stepping stone to a more collaborative Middle Eastern countries and a passageway of Middle East to the world through Turkey. This means the Middle Eastern gas originating from Egypt will be gone transit to Turkey and to the vast European markets and to the whole world.
The agreement also allows Turkey to have the right to take up to 1.5 bcm of gas for its domestic needs. The winning bid will be constructing a 62km pipeline between the northern Syria city of Aleppo and the south-eastern Turkish city of Kilis, both at the borders of each country.
The question now remains whether Jordan and Syria will be paying the same gas price as Turkish and the LNG importers of Europe?
Asian Countries and Oil Subsidy. $100 Still Cheap Oil?
Asian countries, known to have given subsidies in the past and still is, are now start to take its toll with the recent hike of oil price well above $100. Governments and state oil companies across Asia are digging deep in their pockets for $100 oil prices on behalf of consumers especially in Indonesia and Malaysia.
Most of the countries are already looking at reducing subsidy since the cost is well over budget.
Or are they?
Lets look at Asian countries and how they are doing with the subsidy policy for oil.
CHINA OUTLOOK: Chinese Premier Wen Jiabao said in November there was room for further prices rises as domestic prices lagged world oil prices, but Beijing has yet to follow through. RETAIL GASOLINE PRICE: $0.72/litre for 93-octane; $0.67/litre for 90-octane RETAIL DIESEL PRICE: $0.70/litre LAST INCREASES: 10 pct on Nov. 1 2007 RISE SINCE JAN 2003: gasoline prices by 67 pct, diesel by 71 pct. SUBSIDY BORNE BY: Top refiner Sinopec Corp and, to a lesser degree, upstream heavyweight PetroChina. COST OF SUBSIDY: $1.37 billion payout to Sinopec in 2005 $685 million payout to Sinopec in 2006 SUBSIDY AS PCT OF TOTAL GOVT BUDGET COSTS: 2.9 pct in 2005; 0.1 pct in 2006 TOTAL OIL DEMAND: 7.5 million bpd
INDIA OUTLOOK: India's Prime Minister Manmohan Singh said in November that India must trim its growing subsidies on food, fertiliser and fuels if it is to sustain economic growth at around 9 percent. The oil minister said on Thursday that a decision on whether to raise prices would probably be taken before the end of January. RETAIL GASOLINE PRICE: $1.10/litre RETAIL DIESEL PRICE: $0.77/litre LAST INCREASES: Gasoline by 9.2 percent and diesel by 6.7 percent in June 2006 RISE SINCE JAN 2004: 29.1 percent for gasoline, 40.3 percent for diesel SUBSIDY BORNE BY: Government, state-run upstream companies, and state-run retailers COST OF SUBSIDY:
(a) Government through budget 26 billion rupees; (b) Government through the issue of bonds to state oil firms 299 billion rupees; (c) Upstream companies 231 billion rupees; (d) State fuel retailers 170 billion rupees * The value of the non-budget subsidy rises and falls with global crude prices. The above figures relate to a crude rate of $90 SUBSIDY AS PCT OF TOTAL GOVT BUDGET COSTS: 0.4 percent TOTAL OIL DEMAND: 2.4 million bpd
INDONESIA OUTLOOK: The government has yet to announce how it would cope with the soaring global oil prices. It has recently scrapped plans to limit fuel for private cars. RETAIL SUBSIDISED GASOLINE PRICE: $0.48/litre for 88-octane RETAIL SUBSIDISED DIESEL PRICE: $0.459/litre LAST INCREASES: 125 percent increase in October 2005 RISE SINCE JAN 2003: 148 pct for gasoline, 127 pct for diesel SUBSIDY BORNE BY: the central government COST OF SUBSIDY: $9.31 billion in 2007; $4.89 billion in 2008 SUBSIDY AS PCT OF TOTAL GOVT BUDGET COSTS: 12 pct TOTAL OIL DEMAND: 660,000 bpd of subsidised fuel
MALAYSIA OUTLOOK: Prime Minister Abdullah Ahmad Badawi said on Wednesday the government would keep fuel prices unchanged for as long as it can afford. But when the time comes for prices to be increased, the government would do so. RETAIL GASOLINE PRICE: $0.58/litre RETAIL DIESEL PRICE: $0.48/litre LAST INCREASES: gasoline 18.5 pct, diesel 23.4 pct on Feb. 28, 2006 RISE SINCE JAN 2004: gasoline 40 pct, diesel 102 pct SUBSIDY BORNE BY: government COST OF SUBSIDY: The government spends $4.5 billion a year on fuel subsidies, comprising $2.42 billion in direct price subsidies and $2.12 billion in foregone taxes. Prime Minister Abdullah Ahmad Badawi said in November the subsidy could reach 20 billion in 2008 if there are no fuel price increases. SUBSIDY AS PCT OF TOTAL GOVT BUDGET COSTS: 11 pct TOTAL OIL DEMAND: 517,000 bpd
VIETNAM OUTLOOK: The government said in November 2007 it planned to stop subsidising distillates from 2008. It has eliminated subsidies on gasoline and diesel, but has not allowed local prices to rise as quickly as global ones. RETAIL GASOLINE PRICE: $0.81/litre RETAIL DIESEL PRICE: $0.63/litre LAST INCREASES: 15 percent on Nov. 22 RISE SINCE JAN 2004: 167 percent for gasoline, 193 percent for diesel. SUBSIDY BORNE BY: government COST OF SUBSIDY: about $620 million per year SUBSIDY AS PCT OF TOTAL GOVT BUDGET COSTS: 3 pct TOTAL OIL DEMAND: 250,000 bpd
BANGLADESH RETAIL GASOLINE PRICE: $0.97/litre RETAIL DIESEL PRICE: $0.58/litre LAST INCREASES: 21 percent in April 2 RISE SINCE JANUARY 2004: Over 100 percent for both. SUBSIDY BORNE BY: government COST OF SUBSIDY: about $730 million per year TOTAL OIL DEMAND: 60,000 bpd
Eastern Petrochemical’s (Sharq) in Saudi Arabia has delayed the start-up of its linear low density polyethylene (LLDPE) plant. This will more likely to drop supply in the Middle East and Asia from the plant which has a total capacity of 750 ktpa. Only one of the two lines of that capacity is delayed however.
Petrochemical Plants: India BCPL looking for Polypropylene Licensor
Brahmaputra Cracker and Polymer Ltd (BCPL) is looking for technology licensor for its Assam project (Assam Gas Cracker Complex) or known as AGCC to construct polypropylene (PP) unit.
BCPL has already engaged an ECPM (Engineering, Procurement and Construction Management) which is Engineers India Limited (EIL) for the planned 60 ktpa capacity polymer-grade propylene for production of homopolymer PP.
Chemical engineering researches at University of Arkansa, United States have found ways to convert chicken fat into biodiesel fuel via supercritical methanol method. The yield is expected to be higher than 90%. Supercritical methanol treatment dissolves and causes the components to react at high temperature and pressure turning the substance into "supercritical", the highest temperature and pressure at which the substance can exist in equilibrium as a vapor and liquid. The process requires no catalyst which could potentially save production cost.
Major oil companies are known to have been looking at efforts to include biodiesel into blending of crude oil diesel for cheaper feedstocks. The obstacles however has always been inefficient processes which could lead to high production cost.
Biofeedstock may very well be the key answer to renewable energy and feedstocks for petrochemical plants.
Petrochemical Conference: Methanol Markets and Tech
Last call for registrations! We are only about 2 weeks away from the 3rd methanol Markets and Tech conference 22-23 Jan 08 in Bahrain
Be part of this gathering and registerwith your team today.
Updated Agenda of the Meetings
Methanol Industry Overview prospects for new markets to absorb the production surge
Methanol Industry – GPIC’s perspectives
Methanol Project implementation challenges in Algeria
Development of methanol Industry and Prospects as new fuel- financier’s perspectives
Methanol to propylene (MTP)- a paradigm changes by innovation
Macroencomic outlook for the Mena region: preparing for the challenges
China's Methanol Markets development
Prospects of DME
Methanol Market in Russia
MTBE Markets in Asia/ Europe
Biodesel Initiative in India & impact on methanol demand
Formaldehyde markets updates
Acetic acid/vam markets
Biomethanol development in Europe and its applications
Direct Methanol fuel cells ( DMF-Cs) markets
Latest Technology/catalyst development for Methanol production
If you need any additional information about the conference, do feel free to contact me at email: grace@cmtsp.com.sg and Tel: 65 6346 9147 at your convenience.
Oil prices are expected to hover of near 100 dollars per barrel as analysts forecast another tense crude market next year with triple-figure records a real prospect. Despite a bad shape outlook for the world economy including the major consumer countries and especially United States, crude prices are seen settling at elevated levels with oil comfortably above $90, fueling steady flow of petrodollars for the world's oil exporters.
Goldman Sachs is raising its average benchmark price for US oil to %95, a spike of 10 dollars from previous year. The price could reach 105 dollars by the end of 2008 as predicted by many analysts.
Much of the price hike is at the mercy of OPEC the organisation that pumps 40 percent of world oil. Oil has become a key financial indicator attracting different kinds of investors from hedge funds to even pension funds whose stance are usually very conservative in investment portfolio.
We expect that petrochemical products will follow oil prices to be on the high side in 2008.
Petrochemical News: Peru LNG Project Costing $3.9 Billion
Peru LNG Project totalling $3.9 Billion will be partially funded by Inter American Development Bank (IDB) costing $400 million for the liquefied natural gas (LNG) liquefaction plant, a marine terminal and 400 km pipeline.
The investment attracted many eyes since this is Peru's largest private investment at $3.9 billion which potentially could generate $230 million per year not including tax revenues for the countries. The consortium includes US based Hunt Oil, Repsol YPF of Spain, South Korea's SK Energy and Marubeni Corporation of Japan. This ultimately will bring even greater petrochemical investments in the country in the near future.
Petrochemical Plants: Basell Constructing Polypropylene Unit in China
Basell second polypropylene (PP) plant in China will be commissioning in September 2008 with initial PP capacity of 15000 tonnes per annum expandable to 50000 tonnes per year depending on demand.
The PP plant began construction in Guanzhou province will be producing compounding PP.
I am a chemical engineer who now work as a
strategist for a petrochemical oil and gas company by keeping abreast of latest market outlook, technology, new
petrochemical plants, product development and news on petchem industry.
I like to share with others on my experience for chemical engineering
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