International Investment for New Ethylene Capacity Remains Strong

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Researched by Industrial Info Resources (Sugar Land, Texas). Since January 2006, Industrial Info has identified and reported 25 capital projects outside of North America where new ethylene capacity is planned through grassroot construction, expansion, or unit additions. These projects represent over $14.5 billion in total investment value (TIV), exceeding the TIV of 24 ethylene projects identified for the international market during 2005 by 21%. Growth in the Middle East and Asian markets, such as China and India for olefin and petrochemical products continues this substantial level of spending. The ethylene investments identified so far this year span fifteen different countries.

Click on the image at right to view a chart showing the breakdown of spending by world region.

Twelve of these projects are grassroot plants with the largest totaling over $1.2 billion and the smallest at $500 million, each representing significant opportunities for E&C firms, and equipment & service providers. The remaining projects identified this year are expansions or unit additions at an existing plant site with an average project TIV of over $436 million. India is the country with the single largest number of projects with total spending at over $3.8 billion from just six projects. Four of these projects will be grassroot plants and the remaining two projects are major unit additions.

Three of the ethylene investments identified this year each top $1billion, with the single largest project planned by Abu Dhabi National Oil Company (Abu Dhabi, United Arab Emirates), in a joint venture with Borealis Holdings A S (Kongens Lyngby, Denmark), for the construction of a proposed $1.2 billion grassroot plant to be located in Abu Dhabi. Construction is tentatively planned to begin in the spring of 2007 and the will be capable of producing an estimated 1.4 billion metric tons per year when complete in 2010.

Shell Eastern Chemicals Pte Ltd (Singapore, Singapore) and Sonatrach (Algiers, Algeria) both have plans for major ethylene projects, each totaling $1 billion with construction planned to begin this winter for Shell’s grassroot plant in Jurong Island, Singapore. This new plant will use ABB Lummus Technology to produce an estimated 900,000 metric tons per year of ethylene and be constructed by Toyo Engineering Corporation (Tokyo, Tokyo). Sonatrach’s billion dollar unit addition in Skikda, Algeria is just one of two major ethylene projects planned to begin construction next year.

Industrial Info has reported over 100 new international projects during 2006 valued at $16.7 billion within the plastics & resins industry segment, a significant downstream market for ethylene producers. Considering the size and number of projects planned in this downstream market combined with other active petrochemical activity, spending for new ethylene capacity outside of North America is expected to remain strong for several years to come.

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Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.