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TRANSCRIPT
The ‘Development & Supply Partner’ to the Plastics
Industry
Distrupol NIPA
Presentation
Leading European Supply Partners
• Oil and Gas to Plastics
• Polymer Consumption Growth by Region
• Pricing Relationships and Trends
• Impact of Shale Gas Development
• The Changing World of Propylene
• Conclusions
4
Pricing and Trends in Commodity Polymers
Polymers from Oil
5
Transportation
Domestic
Power
Generation
Industry
Other
PetrochemicalsOther
Polymers - 4%
Petrochemical Feedstock Sources
6
Crude
Oil
Gasolines (C5/C6)
(70-140C)
Naphtha- Heavy (C7/C9)
(140-200C)
Atmspheric Gas Oil
Kerosene (C9/C16)
(175-275C)
Diesel Fuel (C15/C25)
(200-370)
Gases
Methane (65-90%)
Ethane, Propane, Butane
Heavy Fractions
Lubricating Oil
Heavy Fuel Oil
Asphalt
Crude Oil
Distillation<29 C
>370 C
200 C
70 C
140 C
300 C
Boiling Point
Yield from Crude Oil
Cracking Naphtha
8
Quench
Boiler
Primary
Fractionator
Compressors
Distillation
ColumnsBoiler feed
water
Furnace
Naphtha
Steam
Gasoline
Fuel Oil
Propylene
Ethylene
Hydrogen
Methane
Butadiene
Monomer Yield by Feedstock
9
0%
25%
50%
75%
100%
Ethane Propane Butane Naphtha Gasoil
Other Hydrocarbons
Butadiene
Propylene
Ethylene
Feedstock Source by Region
10
0%
20%
40%
60%
80%
100%
Western Europe Japan USA
Ethane
Propane
Butane
Naphtha
Gasoil
Ethylene (C2) to Polyethylene
11
C=C
H H
H H
C=C
H H
H H
C=C
H H
H H
Ethylene
C C
H
H
H
H
C C
H
H
H
H
Polyethylene
Polymers from Monomers
12
Petrochemical Feedstock
PropyleneBenzene ParaxyleneEthylene
Chlorine
EDC
VCM
Ethylbenzene
Styrene
GP Polystyrene
BR
HI Polystyrene
PTA
PET
MEGPVC
LDPE LLDPE HDPEPP Co PP Homo
Other Feedstock
Intermediate
Polymer
EO
Global Polymer Demand
13
Polymer Growth by Region 1983 - 2011
14
Forecast Growth by Region to 2016
15
Comments on Pricing
• Current pricing is predominantly influenced by Feedstock
prices
• Crude Oil Prices have remained high
• Supply issues with Crackers have meant high
monomer values
• Crude normally traded in $’s, so currency movements
affect feedstock values
• Overall global supply/demand balance strongly
influenced by Chinese growth rates
16
Polyolefins Historic Pricing
17
Shale Gas Development
18
US Shale Gas Drilling Projects
19
% of US Ethylene from different sources
20
Gas Vs Oil Disconnect
21
The Changing World of Propylene
• Shift to Ethane feedstock in North America – Shale Gas
• Emphasis on continued use of Ethane in Middle East
• Limited co-product supply
• Ethylene derivatives in surplus – propylene shortage
• Limited availability of propylene within refinery systems in
North America and Europe
• Forecast demand growth implies propylene must be
sourced elsewhere
• Propane Dehydrogenation in ME and US
• Refineries and Coal in Asia
• Higher investment costs imply higher propylene values
22
PDH Projects across the world
23
Conclusions
• Pricing in Commodity Polymer Markets are currently
driven by feedstock prices
• Main driver for Feedstock Prices are Oil/Gas prices and
Exchange Rates
• Shale Gas developments in North America will lead to a
significant cost advantage for C2 producers there
• North America will become a significant exporter of
Ethylene derivatives
• Move to Ethane from Shale Gas for Ethylene will lead to
shortage of Propylene, with oversupply of Ethylene
• Non-traditional routes to Propylene are more expensive,
so price differential between C2 and C3 will increase
24
A Polymer for every Application