Is the trend of petrochemical firms switching to LPG from Naphtha still growing and active? Against volatile naphtha prices, which correlates directly with crude oil, LPG prices appears to be the preferred alternative. As in extracted report below, Samsung Total Petrochemicals have taken steps in this direction. Yet, in another, it is reported that the current cracking economics have motivated Chinese Petrochemical Corp to turn away from LPG for Naphtha again.
South Korea’s Samsung Total Petrochemicals has completed a Won 50 billion (US$41.8 million) LPG tank with a storage capacity of 40,000 tons. Samsung Total will use the tank to import 1 million tpa of LPG from October. 600,000 tons of this will be as feedstock, which will reduce consumption of naphtha, while the balance will be resold to local markets. It plans to import 80,000-90,000 mt of LPG per month from Saudi Arabia, Qatar and other Middle East countries. Petrochemical firms can switch to LPG when prices of the conventional feedstock naphtha are high. Compared with volatile naphtha prices, which move directly in line with crude oil, LPG prices are relatively stable.
“With the storage facility, we can ensure stable supplies of LPG and expand our business portfolio,” CEO Yoo Suk-Ryul said in a statement. “We can save Won 20 billion a year as we can choose either LPG or naphtha as feedstocks on the basis of market conditions,” a company official said ~ Plastmart.com 31 May 2010
CPC Corp., Taiwan’s state-owned oil refiner, switched to using naphtha from liquefied petroleum gas (LPG) as a feedstock to produce ethylene starting in June.
The company is using more naphtha as the cost of the oil product has fallen, Jessica Tang, a public relations officer, said by phone in Taipei yesterday. The refiner used between 4.4 percent and 10 percent of LPG at its three ethylene plants in May, she said.
CPC operates three crackers at Kaohsiung in southern Taiwan that can process naphtha, distilled from crude oil, or LPG into ethylene, a material used to make plastics, chemicals and fabrics. The plants have a combined capacity to make 1.1 million metric tons of ethylene a year. Naphtha prices have fallen 16 percent since reaching this year’s high on May 4, according to data compiled by Bloomberg. ~ The China Post 15 Jun 2010
Given the above scenario, it is obvious that petrochemical producers are now challenged into accessing which, between LPG and Naphtha, to use as feedstock. For that reason, insights on feedstock economics, will be the main highlight at the 5th LPGTrade Summit. This annual meet of LPG suppliers and traders who will share on future LPG supply from their companies and potentially seek long-term supply contracts, is meeting on the 25-26 October in Abu Dhabi. Click here for more information.
