The study provides an in-depth analysis of the petrochemical feedstock supply scenario in the key geographies. It explains the reasons for decrease in supply of ethane feedstock in geographies such as the Middle East and Canada. It also explains the impact of new oil and gas discoveries on the petrochemicals industries in the countries such as the US, Brazil and Canada. The study provides the basic petrochemicals (ethylene, propylene, butadiene, benzene, toluene, xylenes and methanol) capacity split by feedstock for all the five regions. The report highlights the change in the supply trend of petrochemical feedstock sources such as natural gas and crude oil. The report is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by GlobalData’s research team of industry experts.
The petrochemicals feedstock supply trend in the major geographies has change in the recent past. While the Middle East countries and Canada are facing lower ethane supplies, the US and Brazil have benefited from the discovery of shale gas and pre-salt reserves respectively. The petrochemicals industry in the Middle East is concentrated in Saudi Arabia, Iran and Qatar and use ethane as the petrochemicals feedstock. Securing new ethane supply contract in the Middle East has become increasingly difficult due to high demand from existing petrochemical plants and the power sector. Due to this many planned petrochemical plants in the region are based on naphtha feedstock.
The natural gas production in Saudi Arabia, Iran and Qatar is increasing at a rapid pace but it is not sufficient o fulfill the requirement from petrochemicals industry. The natural gas production in Saudi Arabia and Iran increased at a Compound Annual Growth Rate (CAGR) of 5.4% and 8.7% respectively. However ethylene capacity in Saudi Arabia and Iran increased at CAGR of 8.1% and 23.1% respectively. Qatar has already imposed a moratorium on its North Dome gas field which has restricted ethane production. Canada is also facing lower ethane production due to lower natural gas supply from Western Canadian Sedimentary Basin (WCSB). The Canadian petroleum industry, however, has also discovered bituminous oil reserve which accounted for more than 50% of its crude oil production in 2010. The Canadian petrochemical industry is now focusing on meeting its future feedstock requirement from these bituminous reserves.
Contrary to the Middle East, where ethane feedstock is becoming scarcer, the US, Brazil and a few European countries have discovered new feedstock sources. The US holds a huge natural gas reserve in the shale rocks which has increased the natural gas supply in the country in the last five years. Many of these reserves contain wet natural gas which would enhance the ethane supply in the country. Brazil has also started the crude oil production from the newly discovered pre-salt reserves and expects to become one of the largest producers of crude oil in the future. Increased crude oil supply will simultaneously enhance naphtha production from Brazil. Shale reserves have been identified in Europe also but there is not significant progress in developing these reserves except in Poland where the commercial production is expected to start in 2015.
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