Xylene Investments Hit $2.6 Billion Worldwide

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Since the beginning of 2006, Industrial Info Resources (Sugar Land, Texas) has identified ten international xylene-based projects being considered for construction to fill global demand. The overall combined total investment value (TIV) for the ten projects is $2.6 billion and almost five million tons of product to be brought online between the second quarter of 2008 and the second quarter of 2011.

Xylene-based chemicals, which include paraxylene and orthoxylene, are considered cyclic crudes & intermediates, according to the Standard Industrial Classification (SIC) code. In most cases, these products are produced on-site of a refinery or along a pipeline that is fed directly from a nearby refinery. The ten projects are all located in countries that are actively building up refining and petrochemical capacities. This list includes China, India, Iran, Kuwait, Qatar and Poland.

Asia has the most capacity planned and the most sites for construction with three. The combined investment for xylene projects in China stands at $1.125 billion, almost half of the worldwide investment planned so far in 2006. Urumqi Petrochemical Company (Urumqui, China) is planning the largest of the units with a 930,000 ton a year paraxylene unit addition at its existing site. A total of $450 million will be invested for the design and construction of unit, which is expected to be operational by the beginning of 2009. In Dalian, China, Dahua Group Dalian Chemical Industry Company (Dalian, China) is planning a grassroot 700,000 ton a year paraxylene plant and will invest over $250 million in the project that is expected to start construction before the end of this year. At the same site, Dahua will also construct an orthoxylene unit with a production capacity of 300,000 tons a year for an extra cost of $125 million. A joint venture between Hyundai Oilbank Company, Limited (Seoul, South Korea) and CEPSA (Madrid, Spain) is planning a new plant in Daecheon, South Korea that will produce 300,000 tons a year of paraxylene at an estimated cost of $300 million.

India Oil Corporation, Limited (New Delhi, India) is currently reviewing plans to invest $800 million in a grassroot facility that will produce an estimated 1.2 million tons of paraxylene each year. If approved in 2007, construction would not begin until early 2008 at the selected site of Paradwip, India. Once built, the plant is expected to be operational by the second half of 2011.

The Iranian state-owned chemical company National Petrochemical Company (Tehran) has included a 130,000 ton a year xylene unit as part of its Olefins 12 complex. Investment for this particular unit is estimated at $50 million. Construction had been anticipated to commence this summer, but was postponed until the fourth quarter of this year as contractors and technology providers are currently being selected for the complex.

Kuwait’s Petrochemical Industries Company has already selected an engineering and construction firm, S K Engineering & Construction Company (Seoul, South Korea), as well as a technology provider, UOP, LLC (Des Plaines, Illinois), a division of Honeywell Specialty Materials business, for a grassroot paraxylene plant. The $300 million facility will produce 750,000 tons a year once operational in early 2009.

Qatar Petroleum (QP) (Doha, Qatar) and Honam Petrochemical Corporation (Seoul, South Korea) have embarked on joint venture project to construct a paraxylene unit at QP’s existing site in Umm Sa’id, Qatar. The $100 million unit, once operational in late 2009, will produce an estimated 150,000 tons a year.

And finally, in Poland, Polski Koncern Naftowy S A (Plock, Poland) is planning a paraxylene unit addition as well as an orthoxylene unit addition at its petrochemical site in Plock. The $200 million paraxylene unit will produce 400,000 tons a year and the $30 million orthoxylene unit will produce a tenth of that with 40,000 tons a year capacity. Construction of the two units is staggered with the orthoxylene unit planned for production in the spring of 2009 followed by operations of the paraxylene unit that summer.

Paraxylene and orthoxylene are used in the production of polyesters and plastics. Demand for both is on the rise as the world’s population increases. Two of the world’s most populous countries are on the list of nations increasing their production capacities, China and India. Polyester is used in fibers, which are needed for clothing and upholstery. Demand for both increases with the population, as more people need clothes, as well as furniture for housing and seats for transportation such as automobiles and aircraft. These days, plastics are entrenched in every aspect of our lives. Packaging, including bottles and food product, are based off plastics. Toys, cars, home furnishing and electronics all utilize plastics, and again, as the world’s population increases, so to does demand for these items.

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