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UPSTREAM | MIDSTREAM | DOWNSTREAM | FUEL & TRANSPORT
Outlook for Petrochemical
Anshuman AgrawalManager, Downstreamaagrawal@stratasadvisors.comsadownstream@stratasadvisors.comM +91 989 194 4883T +65 635 361 27
www.stratasadvisors.com
© Stratas Advisors. All rights reserved. 2
Supply, Demand and Flows
Key Takeaways
CAPEX Requirements
Main Themes
Supply, Demand and Flows
© Stratas Advisors. All rights reserved. 4
Ethylene – Demand
Global (2018-2040)
Demand
• Demand to grow by 127 MMTPA
Source: Stratas Advisors
Units | MMTPA
0
50
100
150
200
250
300
350
2018 2020 2025 2030 2040
Demand
© Stratas Advisors. All rights reserved. 5
Propylene – Demand
Global (2018-2040)
Demand
• Demand to grow by 17 MMTPA
Source: Stratas Advisors
Units | MMTPA
75
80
85
90
95
100
105
2018 2020 2025 2030 2040
Demand
© Stratas Advisors. All rights reserved. 6
Olefin – Supply, Demand
Regional (2018-2040) • Asia supply increases by 61 MMTPA, demand increases 61 MMTPA
Middle East
• Long term Supply increases 32 MMTPA, demand increases 22MMTPA
• Short term S/D +9/+9.4 MMTPA
Source: Stratas Advisors
Units | MMTPA
050
100150200250300350400450
2018 2020 2025 2030 2040
Africa Asia EuropeLatin America Middle East North AmericaRussia & CIS
Dem
and
Supp
ly
© Stratas Advisors. All rights reserved. 7
0
10
20
30
40
50
60
70
2018 2020 2025 2030 2040
Supply Demand
Olefin – Supply, Demand
Middle East (2018-2040) Demand
• Demand to grow by 22 MMTPA
Supply
• Supply to grow by 32 MMTPA
Source: Stratas Advisors
Units | MMTPAD
eman
d
Supp
ly
© Stratas Advisors. All rights reserved. 8
Ethylene – Trade Flow
Middle East to North America :
0
Middle East to Latin America :
0
Middle East to Africa :
0
Middle East to Europe:
0Middle East to Russia & CIS:
0.5, 0.5, 0.3, 0.7, 0.4
Total Export from Middle East: 3, 2, 2.9, 7.5, 12.4
Middle East to Asia: -2.5, 1.5, 2.6, 6.8, 12
Units | MMTPAFrom Middle East (2018, 2020, 2025, 2030, 2040)
© Stratas Advisors. All rights reserved. 9
Propylene – Trade Flow
Middle East to North America :
0
Middle East to Latin America :
0
Middle East to Africa :
0
Middle East to Europe :
0Middle East to Russia & CIS :
0.4, 0.3, 0.3, 0.3, 0.5
Total Export from Middle East: 2.7, 2.6, 2.5, 2.8, 3
Middle East to Asia : 2.3, 2.3, 2.2, 2.5, 2.5
Units | MMTPAFrom Middle East (2018, 2020, 2025, 2030, 2040)
© Stratas Advisors. All rights reserved. 10
Aromatics – Demand
Global (2018-2040) • Total Demand to grow by 43 MMTPA
• Xylene demand growing 1.4% than others aromatics growing 1.2% annually
Source: Stratas Advisors
Units | MMTPA
020406080
100120140160180200
2018 2020 2025 2030 2040
Benzene Xylene Toluene
© Stratas Advisors. All rights reserved. 11
Aromatics – Supply, Demand
Regional (2018-2040) • Asia supply increases by 36 MMTPA, demand increases 58 MMTPA
• Europe supply increases by 5 MMTPA, Middle East by 3 MMTPA, North America by 2 MMTPA
Source: Stratas Advisors
Units | MMTPA
0
50
100
150
200
250
2018 2020 2025 2030 2040Africa Asia EuropeLatin America Middle East North America
Dem
and
Supp
ly
© Stratas Advisors. All rights reserved. 12
Aromatics – Supply, Demand
Middle East (2018-2040)
Source: Stratas Advisors
Units | MMTPA
Dem
and
Supp
lyXylene
• Demand to grow by 3 MMTPA, Supply to grow by 1.6 MMTPA
Benzene
• Demand to grow by 2.1 MMTPA , Supply to grow by 1.2 MMTPA
0.0
5.0
10.0
15.0
20.0
25.0
2018 2020 2025 2030 2040
Benzene Xylene Toluene
© Stratas Advisors. All rights reserved. 13
Aromatics – Trade Flow
North America to Middle East :
0
Latin America to Middle East :
0
Africa to Middle East :
0
Europe to Middle East : 0.2, 0.5, 1.5, 3,
0.3Russia & CIS
to Middle East: 0
Total Import to Middle East: 6.1, 6.8, 8.5, 8.7, 9.3
Asia to Middle East : 5.9, 6.3, 7, 5.7, 9
Units | MMTPATo Middle East (2018, 2020, 2025, 2030, 2040)
CAPEX Requirements
© Stratas Advisors. All rights reserved. 15
Major Petrochemical Projects- Middle East
Source: Stratas Advisors
S. No.Country Company Location Facility Expected Completion
1 Saudi Arabia Saudi Aramco (Total SATORP) Jubail Petrochemical Plant 2022
2 Saudi Arabia SABIC Jubail Ethylene Oxide, Butadiene 2020
3 Saudi Arabia Midchem Riyadh Chloro Alkali 20214 Saudi Arabia Dow Chemical Jubail Polymer5 Saudi Arabia IMC Jubail Methanol 20196 Saudi Arabia Saudi Aramco (Ras Tanura Refinery) Ras Tanura Aromatics 2019
7 Saudi Arabia Petro Raibagh Refinery & Petrochemical complex Rabigh Aromatics 2019
8 Saudi Arabia Farabi Petrochemical Company Yanbu LAB 2021
9 Saudi Arabia Advance Petrochemical Company Jubail Pyoil & Pygas plant 2021
10 Saudi Arabia Yansab Yanbu Ethylene Glycol 201911 Saudi Arabia Saudi Kayan Jubail Jubail Ethylene Oxide 2019
12 Saudi Arabia Saudi Aramco (Jizan Refinery) Jizan Peroleum Refinery 2019
© Stratas Advisors. All rights reserved. 16
Petrochemical Projects- Middle East
Source: Stratas Advisors
S. No. Country Company Location Facility Expected Completion
13 UAE DUGAS- IG Petrochemical Dubai Maleic Anhydride 2023
14 UAE Adnoc & Borealis Abu Dhabi Petrochemical Plant2023
15 UAE Borouge Abu Dhabi PE, PP, Butadiene 2022
16 UAE Adnoc & CEPSA Ruwais LAB 2023
17 Bahrain NOGA Aromatic Complex Manama Aromatics 2020
18 Oman OMPET Sohar PTA/ PET plant 2023
19 Oman ORPIC Duqm Refinery & Petrochemical Complex Duqm Aromatics 2025
20 Oman Mingyuan Holding Group Duqm Petrochemical plant 2022
21 Oman Project Development and management international
Adam Dakhliya Chloro Alkali 2021
22 Oman Orpic - Liwa Plastic industrial complex Sohar PE, PP 2020
23 Kuwait KIPC Al Zour Petrochemical Complex Al Zour Petrochemical Plant2024
© Stratas Advisors. All rights reserved. 17
Major Petrochemical Projects- Middle East
Source: Stratas Advisors
13
17
1415
16 18
19
21
20
22
12
23
11
87
6
451
3
29
10
© Stratas Advisors. All rights reserved. 18
Feedstocks Impact on Cracker Margins
Source: Stratas Advisors
0
100
200
300
400
500
600
700
800
2018 2020 2025 2030 2040
$ U
S/ M
T
Ethane NGL Naphtha Gas oil Refinery Off Gas
Key Takeaways
© Stratas Advisors. All rights reserved. 20
Key TakeawaysOlefins
• Global ethylene demand is forecasted to increase by 2.7% annually
• Global propylene demand is forecasted to increase by 0.8% annually
• Middle East is the overall exporter of olefins• Propylene export from the region is forecasted to remain constant• Ethylene export is forecasted to increase 12% annually due to
increasing supply from the region
• In Middle East, Saudi Arabia is accounting for 58% ethylene production, highest in the region, Saudi is benefitted by the availability of cheap ethane
• In long term Middle East required investment is US $105 billion for olefins plants (for supply of 30 MMTPA of ethylene, 2 MMTPA of propylene)
© Stratas Advisors. All rights reserved. 21
Key Takeaways
Aromatics
• Benzene, Toluene demand is expected to grow 1.2% annually, whereas Xylene demand is forecasted to grow by 1.4%
Cracker Margin• Naphtha based cracker facilities will be economically benefitted next few
years because of low crude oil prices
• Longer term ethane base cracker facility will be economically benefitted, as the expected price differential between natural gas and crude oil will increase
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