Ethylene in the Spotlight as Projects Near Startup, Others Show Promise

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Researched by Industrial Info Resources (Sugar Land, Texas)--The ethylene segment of the Chemical Processing Industry is expected to see plenty of activity over the next few years, with several key projects nearing startup dates and others on the horizon. Trey Hamblet, Industrial Info's VP of Global Research for the industry, provided listeners with the latest details on this closely watched sector.

Click on the video below to listen to Hamblet discuss spending trends in the ethylene market.


The new wave of projects is being driven, in part, by inexpensive feedstock; prices for natural gas, the primary feedstock for new cracker capacity, remain at low levels. "There's still a cost advantage in the gas-to-oil ratio that's very, very significant, even as the price of oil has fallen sharply over the last two years," Hamblet said.

The U.S. has a solid storehouse of ethane and other inexpensive natural gas liquids (NGLs) in its shale plays, such as the Marcellus and Utica in the Northeast.

Ethylene also is benefiting from strong downstream demand. Polymer prices have remained strong, which has encouraged producers.

Several large cracker projects already are in the construction phase and are estimated to bring up to 14 billion pounds of new capacity to the market over the next 12 to 24 months. Two other approved, funded projects are set for Louisiana soon thereafter.

Hamblet also noted that 2016 will see an "exceptionally high" number of planned turnarounds for ethylene units: "Over the last couple of years, ethylene producers have run and run hard, and postponed and delayed as much maintenance as they could. And they're coming to a point in time when they're going to have to stop and address these issues that have been delayed or postponed previously."

Worldwide, more than 129 billion pounds of ethylene capacity are being proposed. North America has more than 38 billion pounds proposed, but the Middle East is not far behind with almost 32 billion pounds proposed.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at https://www.industrialinfo.com/.