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OAR Box 1872 

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Document Number: 

19) II-I-68 

Docket Number: 

A-90-19 

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A-90-19 

n-i-68 

Annual Petrochemical Report, 

About this issue... 

; Worldwide ethylene capacity shot up last year in response to solid 

!

 demand for olefins derivatives. According to the Journal's exclusive 

|. -survey of worldwide petrochemical plants, much of the capacity 

I increase occurred in the US. But capacity-expansion plans Indicate 

\ rapid growth will also occur in the Far East and Mid East regions. 

I- Details of existing and planned capacity are given in this special 

: report, along with capacity and demand for benzene and styrene, 

| two important petrochemicals on the world scene. Another article in 

- this special section focuses on the Mid East. /• 

•^<4~ 

r ^ „ 

^C' 5 V / 

Derivative demand pushes 

ethylene capacity up 

Richard A. Corbett 

Refining/Petrochemical Editor 

Worldwide ethylene capacity grew more in 1988 

than during any other year during the decade, in 

response to solid olefins derivatives demand, according to the Journal's latest survey of worldwide 

petrochemical facilities. Ethylene capacity soared 

6.6% above last year's capacityHigh demand for olefins~derivatives has 

boosted both demand and prices for basic olefins 

(ethylene and propylene) and has kept petrochemical facilities running at high utilization raTes. 

/ Profitability is the best it has been during the 

decade. 

I S I The high demand, high plant utilization, and 

good profits have spurred numerous announcements for more ethylene capacity worldwide, 

particularly in the U.S., the Mid East, and the Far 

East. 

Unfortunately, the bright picture in the petro- ,V. 

chemical industry may dim some when thesep-' 

projects come on stream during the early 1990s. 

Derivative demand is also pushing demand 

for aromatics such as benzene. Ihe benzene 

surplus is rapidly disappearing, resulting in the 

need for higher plant utilization rates and rising. 

benzene prices. 

One key derivative of both ethylene and 

benzene is styrene monomer. Its demand was up 

during 1988, forcing styrene plant utilization to 

100% worldwide? " 

Ethylene capacity soars. Worldwide ethylene 

capacity soared to 51,972,000 metric tons/year as 

of June 1,1989, from 48,766,000 metric tons/year 

as of June 1, 1988 (Table 1). 

OCJ SPECIAL Sept 4,1989, Oil & Cas (oumal 53 
P.3 

Sources of benzene 

Fig. I 

1968 

Source: DeWm & Co. 

1969 

|HD A 

1990 

• neiorrrm 

1991 1992 

• Etttytarw E J Co * 

1993 

OQj 

Ethylene capacity by country' 

AIM 

North America 

U.S. 

Canada 

Tot* 

Latin America 

Argentina 

Bolivia 

Brazil 

Chile 

Colombia 

Mexico 

Puerto Rico 

Venezuela 

Total 

Europe 

Austria 

Belgium 

Finland 

France 

"•Vest Germany 

Greece 

Italy 

The Netherlands 

Norway 

Portugal 

Spain 

Sweden 

Switzerland 

U.K. 

MM 

Asia/Pacific 

Australia 

India 

Japan 

Korea 

Singapore 

Taiwan 

Total 

Other 

Algeria 

Hurtgary 

Iran 

Israel 

Qatar 

Saudi Arabia 

South Africa 

Syria 

Turkey 

Tatal 

Wortt Total 

Tabte 1 

1.000 metric 

1917 

16,820 

2,200 

Htt 

254 

230 

1.461 

60 

'15 

?32 

413 

150 

3315 

320 

520 

200 

2,400 

3.790 

15 

1.485 

2.285 

390 

300 

966 

365 

30 

1,845 

14311 

420 

256 

5.357 

505 

300 

953 

7,7*1 

364 

26 

130 

280 

1.611 

150 

355 

2,916 

48.295 

teas/year 

16,985 

2,358 

19343 

255 

230 

1.502 

60 

200 

932 

413 

150 

3.74* 

320 

520 

230 

2,435 

3.790 

15 

1.845 

2.325 

390 

300 

966 

355 

30 

1.945 

15,496 

420 

256 

4.295 

505 

300 

953 

6.729 

364 

250 

26 

130 

280 

1.611 

220 

250 

355 

3,496 

48.768 

1969 

19,616 

2,407 

22,023 

262 

230 

1.573 

60 

215 

932 

413 

150 

3339 

ffg 

230 

2.455 

3.790 

15 

1.845 

2,360 

390 

300 

980 370 

30 

1.975 

15.590 

455 

257 

4.458 

505 

300 

953 

6,928 

364 

250 

26 

130 

300 

1.611 

320 

250 

355 

3,606 

51,972 

•As of June 1 , 1989. 

Ail regions of the world scored capacity gains, with North America the 

highest with a gain of 2,680,000 metric tons/year-almost ail oi thai In the 

U.S. 

U.S. ethylene capacity jumped 

more than 15% to 19,616,000 metric 

tons/year from 16,985,000 metric 

tons/year last year. The U.S. now has 

37.7% of the global ethylene capacity. 

Much of the capacity gain in 

U.S. was accomplished by increasing 

capacity of existing plants through 

debottlenecking and modernization 

projects. But a substantial boost in 

U.S. capacity, 1,830,000 metric tons/ 

year, was a result of the restart <>i I tow 

Chemical Co.'s Midland, M K II 

ities. 

The Asia-Pacific region and the Mid 

East also scored healths pacity 

gains over last year. The Asi 

region boosted capacity to 6 

metric tons/year from 6,729,000 last 

year, and Mid East capacity rose to 

3,606,000 metric tons/year from 

3,486,000 last year. 

The capacity gain in the Mid East, 

although healthy, has not increased 

enough to threaten ethylene pro 

ers in other parts of the world, part it u 

larly Western Europe, as was thought 

during the mid-1980s, despite the region's large amounts of associated gas 

for olefins plant feed. 

Western Europe, a region th.it 

fered much excess capacits during tha 

middle 1980s, boosted capacity u> 

15,580,000 metric tons/year from 

15,466,000 last year. The gain in 

capacity was distributed evenly 

among the countries of the region. 

Capacity to surge. Ethylene capacity will grow considerably in the U.S., 

the Mid East, and the Far East b\ 

1993. Estimates indicate that world 

wide capacity will reach more than 

16,400,000 metric tons/year by tha 

end of 1993.' 

Announced capacity expansion 

the U.S. will add about 6,900,000 

metric tons/year to current capacity by 

1993 if they all come on stream as 

scheduled (Table 3). Announced addi 

tions for the Far East and Mid Easi will 

boost capacity in those regions by 

about 9,600,000 metric tons/year by 

1993. 

Announced expansions in the U.S. 

amount to more than .i 34% inc n 

over current capacity. U.S. growth in 

ethylene demand is only expected to 

rise about 3.5% year. Obviously, excess capacity is likely during the early 

1990s. 

Ethylene demand, spurred by higher derivatives demand, will be better 

for the Far East with a demand growth 

of about 5%/year. But announced <ih 

ylene capacity expansions there total 

54 Oil * Gas Journal, Sep 4,1989 OG J SPECIAL 
P.4 

Installed ethylene capacity: 1989* (continued) 

Table 2 (continued)! 

Capacity, 

1,000 aetric tadtorn/year tiartl 

Capacity, 

1^*00 -aetric 

Coprottoctt tontytar' Company aACXbOO 

Capccrty, 

IJOOMtric readCapacrty, 

1,000 Mtric 

Coprohctt to&^ttrf 

NORWAY 

l/SNoretyl 

TOTUSAi 

Companhia Nacional 

de Peroquimica 

fUERTO RBO 

Union Carbide Caribe 

Inc. 

M T M 

Qatar Petrochemical 

aVUflUMUU 

Saudi Petrochemical Co. 

Arabian Petrochemical Co. 

Saudi Yanbu 

Petrcchem. Co. 

SatdiAnL-iilabjl 

SMtLAPORE 

Singapore Petrochemical 

SOUTH AFHCA 

SssolUd. 

SPAIN 

Dow 

Repso! Petroleo S.A. 

Spain Ha l 

SWEDEN 

Statoil PetrochemieA/B 

Raines 

Sines 

Ponce 

Umm Said 

Al-Jubail 

Al-Jubail 

Yanbu 

Singapore 

Sasolburg 

Tarragona 

Puertollano 

Tarragona 

Stenungsun 

390 NGL Propylene 

300 IPG.N Propylene 

Butadiene 

Pygas 

Fuel oils 

413 N.LPG Propylene 

300 E 

656 E 

500 E 

455 E 

1,611 

Propylene 

Butadiene 

Pygas 

70 

150 

40 

220 

36 

227 

6 

5 

15 

SWTTZIRLAND 

Lonza, A.G. 

mtu 

^General Fertilizer 

TAIWAN 

Chinese Petro. Corp. 

China Petrochemical 

Development Corp. 

Taiwan total 

TURKEY 

Yarpet Yarimea 

Petrokimya A.S. 

Vsp 

Katteneh 

Koahsiung 

Touten 

tonit 

30 N.LPG Acetylene 

250 E 

300 IPG.N Propylene 

3 2 0 Syn. gas 

3 5 0 N Propylene 

Butadiene 

Pygas 

240 N,R Propylene 

390 LPG.N Propylene 

Izmir 

Tefkey total 

UNITED KINGDOM 

BP Chemicals Baglan Bay 

Grangemouth 

ICI/BP Wilton 

Exxon Chemical Olefins 

Inc. 

U X total 

3 7 0 N,P 

more than 4,200,000 metric tons/year 

by 1993, meaning that some over 

capacity will exist in the Far East also. 

As derivatives production capability"1 

in the Far East increases, derivative 

exports from the U.S. will likely decline. Lower U.S. exports could further exacerbate an ethylene over-capacity situation because the U.S. does 

not currently export ethylene, only its 

derivatives. 

There is some optimism shown by 

U.S. ethylene producers, however. 

Some have said that many of the 

announced projects may not be completed on time because of longer plant 

equipment lead times and busy fabricating facilities. And as the 1990s 

approach, some producers may scale 

down expansion plans. 

If some of the announced expansions are delayed as little as 2 years, 

and if capacity is less than an6 0 Oil & Gas Journal, Sept 4,198 9 OC ) SPECIA L 

Propylene 

Pygas 

Fuel oils 

130 

50 

300 

160 

180 

180 

130 

40 

ffNEZUEU 

Pequiven 

WORLD TOTAL 

*(As of June 1,1989) 

Fawtey 

Fife 

El Tablazo 

899 N,G 

54 E 

853 

55 N • 

300 N 

353 

350 N 

270 

750 N,P 

105 N.G 

500 E .. 

1,975 

150 E,P 

Propylene 

Butadiene 

477 

128 

Propylene 

Pygas 

Fuel oils 

Propylene 

C 

Pygas 

Fuel oils 

40 

6 

7 

138 

80 

250 

38 

Propylene 

Butadiene 

Propylene 

Butadiene 

Propylene 

Butadiene 

Propylene 

Butadiene 

Propylene 

200 

60 

180 

48 

350 

90 

100 

35 

31,972 

•Key: E - ethane, P » propane, 8 « butane, R • refinery streams, N - naphtha, G « gas 

oil, LH - light hydrocarbons, NGL - natural gas liquids (ethane, propane, butane), LPG -

liquefied petroleum gas (propane, butane). EtOH - ethanol 

i Coproduct production is only estimated or design quality. Actual production can nry widely 

depending on feedstock slate, severity, etc. 

J' 

S 

Where benzene goes 

Fig- 2 

1988 

Source: DeWirt & Co. 

1989 

Supply 

1990 1991 1992 1993 

I Other O Cyclohexane Q Cument/prtanol L"Z3 EB/t1yr»ne OOJ 
P.5 

Table 3 

Some of the major ethylene projects planned 

Company 

Capacity expansion 

1,000 metric tons/year 

Estimated 

start date 

U.S. 

Amoco Chemical Co. 

Cain Chemical Co. 

Chevron Chemical Co. 

Dow Chemical Co. 

Exxon Chemical Co. 

Formosa Plastics Group 

Lyondell Petrochemical Co. 

Mobil Chemical Co. 

Phillips 6 6 Co. 

Quantum Chemical Corp. 

Shell Chemical Co. 

Texaco Chemical Co.* 

Union Carbide Corp.* 

Union Texas Petroleum Corp. 

Vista Chemical Co. 

Westlake Petrochemicals Corp. 

Total estimated U.S. additions 

SOUTH KOREA 

Daelim 

Yukong 

Lucky 

Others (6) 

TAIWAN 

China Petroleum 

Formosa Plastics 

THAILAND 

Thai National Petrochemical Co. 

Thai National Petrochemical Co. 

JAPAN 

Restarts 

New cracker 

INDIA 

Nagothane 

Madras 

INDONESIA 

Several studies 

MAYLASIA 

Several contenders 

CHINA 

Shanghai 

AUSTRALIA 

Petrochem Ind. Ltd. 

EGYPT 

Egyptian Petrochemical Co. 

IRAN 

National Petrochemical Co. 

IRAQ 

Iraq Petrochemical Co. 

KUWAIT 

Kuwait Petrochemical Co. 

NIGERIA 

Element Petrochemical Co. 

SAUDI ARABIA 

Sabic/Shell 

Petrokemya 

Sabic/Mobil 

Total Far East and Mid East S 

680.3 

453.5 

90.7 

680.3 

453.5 

680.3 

272.1 

453.5 

680.3 

680.3 

453.5 

181.4 

226.8 

181.4 

181.4 

453.5 

6,802.8 

300.0 

400.0 

350.0 

1,300.0 

400.0 

400.0 

315.0 

315.0 

445.0 

400.0 

300.0 

300.0 

300.0 

300.0 

300.0 

145.0 

200.0 

490.0 

600.0 

285.0 

400.00 

300.0 

500.6. 

500.0 

9,545.0 

1993 

1993 

1989 

1992 

1990 

1992 

1989 

1991 

1991 

1991 

1989 

1989 

1990 

1990 

1991 

1989 

1989 

1992 

1995 

1992 

? 

1990 

1995 

1992 

1993 

1990 

1991 

1993 

1993 

1990 

1991 

1991 

1993 

1993 

1992 

1990 

1993 

1993 

• o > 

•Restarts of existing facilities. 

Source: DeWitt & Co. Current as of June 1 , 1989. 

nounced, ethylene demand could rise 

enough to ease any excess capacity, 

according to some producers. In any 

event, the bright conditions in the 

petrochemical industry may likely dim 

bv thpparlv 199ns. " 

Benzene surplus dwindling. Olefins 

and aromatics derivatives demand is 

causing heavier demand for benzene. 

As a result, surplus benzene capacity 

is beginning to disappear rapidly.2 

Benzene is produced primarily in 

hydrodea Iky lation (HDA) units, disproportionation units, catalytic reformers, ethylene furnaces, and from 

coal-processing facilities (Fig. 1). The 

petrochemical sources, HDA and disproportionation units, reformers, and 

ethylene plants, account for almost all 

of the benzene produced worldwide. 

Nameplate capacity to produce 

benzene from all sources was about 

27.6 million metric tons/year in 1988 

and is expected to grow to about 30.9 

mijlon metric tons/vear bv 1993. But 

all of the nameplate capacity cannot 

be utilized for benzene production 

because of the characteristics of the 

feedstocks processed in reformers and 

ethylene furnaces and because of utilization rates achieved in HDA units. 

These constraints result in current 

actuaTBenzene production capacity at 

about 75-8U"/o ot nameplate capacity," 

or about 15 million metric tons/year 

globally. Benzene demand was esti- \\0 

mated at about 24 million metric tons/ 0 

year in 1988."" That is expected to 

grow to about 31 million metric tons/ 

year bv i«n». 

A major derivative of benzene is 

ethylbenzene, the basic component of 

styrene monomer. Other uses include 

cumene and phenol production, cyclohexane production, and other 

widely varying uses. 

Ethylbenzene consumed about 12 

million metric tons/year of benzene, 

cumene/phenol about 4.5 million 

metric tons/year, cyclohexane about 4 

million metric tons, and other uses 

about 3.5 million metric tons/year 

(Fig. 2). These uses equaled, or slightly exceeded, actual benzene production capacity during 1988. 

Global demand for ethylbenzene/ 

styrene monomer is expected to grow 

by 37% by 1993, cumene/phenol by 

24%, cyclohexane by 19%, and other 

uses by about 10%/ 

U.S. benzene demand in 1988 was 

about~8.9 million metric tons/year. 

Capacity was slightly more at about 

l y million metric tons/year (hg. J).2 

LQ>. demand is expected to grow to ^ ^ 

about 11.7 million metric tons by ® 

1993. compared to an expected benzene capacity of about 11 million 

metric tons/vear. 

Styrene monomer. Styrene monomer has become one of the most 

•VO C ) SPECIAL Sept 4,1989, Oil & Cas Journal 61 
P.6 

:.' Ii •-. * 

Table 4 

Estimated world styrene capacity, 1989 

Estimated capacity 

Producer 1,000 metric tons/year 

U.S. 

Amoco Chemical Co., Texas City, Tex. 

ARCO, Channelview, Tex. 

ARCO, Kobuta, Pa. 

Chevron Chemical Co., Oonaldsonville, La. 

Cosmar Chemicals, Carville, La. 

Dow Chemical Co., Freeport, Tex. 

El Paso Products Co., Odessa, Tex. 

Huntsman Petrochemical Co., Bayport, Tex. 

Sterling Chemical Co., Texas City, Tex. 

Total U.S. 

CANADA 

Dow Chemical Canada Inc., Samia, Ont. 

Polysar Ltd., Sarnia, Ont. 

Shell Canada Ltd., Scottord, Alta. 

Total Canada 

WESTERN EUROPE 

Atochem, Gonfreville, France 

Atochem. Lacq, France 

BP Chemicals Ltd., Baglan Bay, U.K. 

BASF AG, Ludwigshafen, West Germany 

BASF AG, Wesseling, West Germany 

Dow Chemical (Nederland) BV, Terneuzen, The Netherlands 

Enimont, Ravenna, Italy 

Enimont, Mantua, Italy 

HOIs, Marl, West Germany 

Norsolor, Carl ing, West Germany 

Repsol, Puertollano, Spain 

Shell Nederland Chemie BV, Moerdijk, The Netherlands 

Total Western Europe 

OTHER REGIONS 

Japan 

Taiwan 

Korea 

China 

Latin America 

Others 

Total other regions 

Total world 

U.S. benzene capacity/demand 

17*>i 

I 1986 

^Source: DeWitt 8 Co. 

1989 

' Supply 

345 

630 

100 

270 

680 

590 

145 

450 

680 

3,690 

65 

365 

360 

790 

250 

25 

220 

500 

380 

770 

45 

280 

• 250 

300 

110 

320 

3,450 

1,785 

340 

230 

200 

560 

1,805 

4,920 

13,050 

Source: BASF AG and Grand Pacific Petrochemical Corp., June 1 , 1989. 

Fig. 3 

1990 1991 1992 1993 

I Other C D Cyeloheiume O Cumene/phenol L J EB'ftyrene QGJ 

important petrochemical derivatives 

during the last 2 years. Its price has 

firmed, and its demand is up.3 

Total global styrene monomer capacity by mid-1989 was estimated at 

about 13,050,000 metric tons/year 

(Table 4). The U.S. and Western Europe were at about equal capacity, 

with U.S. capacity at about 

3,890,000 metric tons/year, and 

Western Europe capacity at about 

3,450,000 metric tons/year. 

Japan, with 1988 capacity at about 

1,785,000 metric tons/year, ranks 

third. 

Strong demand has resulted in high 

styrene plant utilization rates throughout the world. Plants are running at 

100% worldwide.3 

U.S. demand ran at about 3.9 million metric tons/year in 1988, with 

plants running at about 97% utilization. 

Western European plants were running at about 102% utilization during 

1988 to meet the region's styrene 

demand of about 3.45 million metric 

tons/year. 

Demand in Japan ran about 1.6 

million metric tons/year during 1988. 

Styrene plant utilization rates there 

ran at about 95.2%. 

Global styrene demand is expected 

to rise 3%/year to 1993 when demand 

is expected to be about 14.1 million 

metric tons/year.3 But global capacity 

increases of about 6.4%/year by then 

will raise capacity to about 17 million 

metric tons/year. 

As a result, utilization rates will 

begin to fall slightly from 98.7% in 

late 1989, to about 82.8% in 1993. J 

The highest increases in demand 

will occur in the far East. The lowest 

increases will occur in the U.S. and 

Western Europe. 

About 700,000 metric tons of styrene monomer were exported to the 

Far East in 1988.3 Although this is 

expected to drop to about 550,000 

metric tons in 1992, the region will 

still be a hot export market. 

The U.S. and Canada will continue 

to produce a large surplus of styrene 

monomer where about 300,000 metric tons from each country will find its 

way into export markets in the Far 

East.3 Canada will likely increase exports to the U.S. as a result of the 

recent relaxed trade policies with the 

U.S. 

References 

1. Armstrong. Earl H., DeWitt & Co, Inc., "World 

Ethylene-A Hot Topic," 1989 Petrochemical 

Review, DeWirt & Co., Inc.. Mar. 28-30, 1989, 

Houston. 

2. Barry, William P., DeWitt & Co. Inc., "Capacity 

to Consume Benzene Creeping Up on Capacity 

to Supply," 1989 Petrochemical Review, 

DeWitt & Co. Inc., Mar. 28-30, 1989, Houston. 

3. Dimpfel, Klaus, W., BASF, AC, "Styrene-A 

World Product," 1989 Petrochemical Review, 

- — DeWitl & Co., Mar. 28-30, 1989, Houston. 

6 4 Oil & Gas Journal. Sept 4,1989 OG J SPECIAL