13
December
2014
HYDROCARBON
ENGINEERING
W
T
he global chemicals sector is in the midst
of a major disruption. The shale gas
driven boom is expected to bring
significant North American supply at a
highly competitive cost of US$ 500 – 600/t of
ethylene. The shortage of gas in the Middle East is
forcing companies in that region to use mixed
feedstock (propane, butane and light naphtha) for
new projects that is putting the traditional cost
advantage of the Middle East under pressure,
moving them from approximately US$ 300/t to
US$ 600 – 950/t of ethylene for new projects.
Under these circumstances, the naphtha based
European and Asian producers find themselves
under increasing threat as they have become the
marginal suppliers with their cost position between
US$ 1250 – 1450/t of ethylene. In addition,
countries in the ASEAN region, such as Thailand,
which have traditionally relied on gas based
petrochemical crackers, are challenged with the
decreasing natural gas production that is expected
to decline at -4.1%/y to 2030.
Against this backdrop, countries in the ASEAN
bloc
1
are in the process of setting up a number of
new megaprojects within the region to cater to the
increasing local demand. For example, Vietnam is
embarking on potentially two major integrated
refinery and petrochemicals complexes. Malaysia
