How short will ethylene get?. Peter Frenken Fourth Global PVC Conference 18-19 November 2003. SABIC: “a new kid in town”? Global competitiveness and who are the locals? Enough mega plant addittions to supply ethylene? Conclusions and answers!. SABIC : Facts and Figures. SABIC strategy.
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How short will ethylene get?
Fourth Global PVC Conference
18-19 November 2003
SABIC: “a new kid in town”?
Global competitiveness and who are the locals?
Enough mega plant addittions to supply ethylene?
Conclusions and answers!
SABIC : Facts and Figures
14.5 million mt/year Basic Chemicals (ethylene, propylene, methanol, MTBE, butadiene etc.)
4.8 million ton of Polyolefins.
Basic facts SABIC
Established in 1976
16,800 employees in 23 countries (EU 2,300)
Sales € 11.4 bln in 2002
Net profit: 2003 Q1/Q2 850 mln $
Total production in 2002 were 40 mln tonnes (EU 6 mln)
70% shares by KSA government
Joint Ventures with a.o. Shell, Exxon and Mitsubishi
Crude Industrial Ethanol (CIE)
Methyl Tertiary Butyl Ether (MTBE)
……of an allready growing affiliate……
…. resulted in a #4 global ranking for ethylene….
…. and for poly-olefins as well. (#4 in EU)
Summarising SABIC Manufacturing and R&D sites
4 highly integrated sitesdirect access to low cost feedstock
world-scale facilitiesdirect market access
Global competitiveness developments:
Europe has become a local-for-local producer,
USGC will get one
#1: Cheap gas feedstock only in the Middle East
Impact of cheap feeds on derivatives will be ….
Take into consideration:
Marketing and Sales cost
Research and Development
Other business cost
…. a major cash costs advantage for the ME
Typical ranges for
gas and naphtha
in cash cost
Low High Low High
Gas price ($/mmBTU)
On a delivered cost basis this advantage will remain!
Strong cracker sites are concentrated in the ARG region
Current ethylene capacity around 1mio tonnes
Potential to grow to 1.5 mio tonnes
High integration cracker/derivatives
Strong cost position
ARG area: good ethylene logistics, not yet for propylene.
USGC: good logistic integration
#4: a market means population, wealth and/or growth.
Population is shown here.
In the ’90s EU became a local for local for EU producer
USGC will loose export position to Asia to the Middle East because of the structural increase of natural gas based ethane feedstock to the crackers
Only local cost leaders will be able to compete against Middle East delivered costs
How has European ethylene been doing?
Ethylene part 2:
Ethylene will be short because of capacity growth is behind demand growth/economic growth scenario
A.A.I PE demand 4.4% in 2004-2008PVC 4.5%, styrene 4.2%, MEG 6.0%
ME capacity share will further increase from 9 to 17%
By 2008 Europe and USA will no longer have a dominant position