Ronnie Lim, Business Times 25 Mar 10;
BANG on schedule, Shell's new ethylene cracker - the centrepiece of its new US$3 billion Shell Eastern Petrochemicals Complex (SEPC) here - was successfully started up this week, producing on-specification ethylene since Monday, the company announced yesterday.
This means that SEPC is now practically fully in operation, following December's start-up of its main downstream plant producing mono-ethylene glycol (MEG). A remaining butadiene extraction unit is slated to come on-stream over the next few months.
But there is no further news at this point whether Shell has managed to find more downstream parties - with whom it has been in discussions - to take up the additional ethylene and propylene available from its new cracker.
Shell's new ethylene cracker complex has a capacity of 800,000 tonnes of ethylene per annum, as well as 450,000 tonnes of propylene and 230,000 tonnes of benzene.
These are essentially petrochemical 'building blocks' that will be used primarily for downstream chemical plants located on Jurong Island, including the Shell MEG plant.
Ben van Beurden, Shell Chemical's executive vice president said: 'The completion of SEPC will create Shell's biggest, fully-integrated refinery and petrochemicals hub, bringing economic and efficiency benefits in terms of operations, logistics and feedstock.'
The world-class cracker is strategically located adjacent to its Pulau Bukom Refinery, which has been modified to enable it to supply the cracker with various feedstock.
Its feedstock flexibility enables it to process various types of feedstock, ranging from liquefied petroleum gas to heavy liquid hydrocarbon, such as hydrowax.
'This flexibility can help to maximise returns as economics shift between hydrocarbon streams, and importantly, it will provide greater security of supply for our customers,' Shell said.
Mr van Beurden told BT last December that Shell, together with its new partner in Petrochemical Corporation of Singapore, Qatar Petroleum International, as well as other petrochemical players here are also currently looking at building a LPG terminal here to bring in LPG feedstock for Singapore's petrochemical crackers.
Rise in Asian petrochem capacity may spur run cuts
Business Times 30 Mar 10;
(SINGAPORE) Asia will add record naphtha cracking capacities this year while new Middle East plants are boosting output, which may force petrochemical makers to cut runs from the second half after producing at full tilt since 2009.
Cracker run cuts in Asia, which analysts said would bring production to around 85 per cent of capacity, are crucial to maintaining petrochemical margins, but will hurt naphtha demand.
China, South Korea, Thailand, Singapore and India will add 6.3 million tonnes of ethylene capacity, taking the region's total to 48.33 million tonnes per year. China will account for more than a third of the additions, reducing its need for imports.
Asia will not escape the brunt of the glut this year, as more competitive Middle East petrochemical plants, which use cheaper gas instead of naphtha as feedstock, have also started cranking up production.
This was unlike last year when several petrochemical makers were running their crackers at full blast to meet sizzling Chinese demand for plastics amid a robust economy.
'Everyone was waiting for a tsunami,' said Mazlan Razak of petrochemicals consulting firm DeWitt & Co, referring to a surge in global supply led by new Middle Eastern capacities last year.
Traders had expected the glut to trigger permanent shutdowns of polymer plants and crackers in Asia and Europe last year. But such closures did not take place because of start-up delays in Middle Eastern plants.
Yanbu National Petrochemical Co (Yansab), 51 per cent-owned by Saudi Basic Industries Corp, was the most recent to start operations around January this year.
Any run cuts, the first since Asian capacity utilisation was slashed as low as 70-75 per cent in third-quarter 2008 at the onset of the worst recession in decades, will coincide with a heavy maintenance slate this year and damp the naphtha market.
Naphtha suppliers will be hard hit if Asia's top petrochemicals buyer China lowers imports of ethylene and polyethylene (PE), the world's most-used plastic, found in pipes and cables needed in infrastructure to grocery bags.
China's annual PE demand is still expected to grow, estimated at 7-10 per cent between this year and next, but its imports will fall because of new capacities, said Mr Razak.
'China's PE import growth could be negative (versus 2009), with volumes projected at 6.5-7 million tonnes this year,' said Mr Razak. This is down from 7.4 million tonnes in 2009. South Korea was the leading PE exporter to China, accounting for 18 per cent, or 1.34 million tonnes, followed by the US at 13 per cent, Saudi Arabia at 11 per cent.
'The ranking is likely to change in 2010. Saudi Arabia will export more this year,' he said.
China's ethylene imports will also fall in 2010, to 770,000 tonnes versus 1.02 million tonnes last year, said consultancy Chemical Market Associates Inc (CMAI).
'There are new crackers in Singapore, Thailand and China. Margins will ease and cracker operations will be reduced to around 85 per cent capacity from second-half of the year,' said Jinsu Yim of CMAI. -- Reuters
