11 Jan 2019
Posted in Oil & Gas
China and US lead global ethylene capacity additions by 2026, says GlobalData
Global ethylene capacity is expected to experience considerable growth between 2017 and 2026, increasing from 180 million tons per annum (mtpa) in 2017 to more than 270 mtpa in 2026, led by China and the US, according to GlobalData, a leading data and analytics company.
The company’s report: ‘Q4 2018 Global Ethylene Capacity and Capital Expenditure Outlook – Saudi Arabian Oil Co and Exxon Mobil Corp Lead Global Capacity Additions’ reveals that around 140 planned and announced plants are scheduled to come online, predominantly in Asia and the Middle East, during the forecast period.
Within Asia, China plans to add a total capacity of approximately 22.2 mtpa by 2026 with the help of 36 planned and announced ethylene plants. Capital expenditure (capex) for these plants is US$43bn. Major capacity additions will be from Exxon Mobil Corp.
Dayanand Kharade, Oil & Gas Analyst at GlobalData, comments: “China will dominate the global ethylene market in the mid-term with both the biggest number of new projects and the largest absolute capacity expansion driven by economic growth. The country is set to build around 36 ethylene planned plants in the forecast period.”
China is forecast to account for 54% of the Asian capacity addition and 25% of the global capacity addition during the outlook period.
GlobalData identifies the US as the second largest in terms of ethylene capacity additions with a capacity of around 15.9 mtpa from 17 planned and announced ethylene plants. The country plans to spend US$27.24bn during the forecast period. Major capacity additions will be from Formosa Plastics Group.
The Middle East follows in terms of ethylene capacity additions. Within the region, Iran has 17 planned and announced ethylene plants with a total capacity of 10.6 mtpa by 2026. Capex for these plants totals US$20.45bn over the next nine years.
Kharade adds: “For the US and Iran, the low-cost abundant supply of natural gas is the primary reason for the rush in ethylene capacity additions.”
In the Former Soviet Union (FSU), most ethylene capacity additions will be in Russia, with capacity of approximately 7.2 mtpa by 2026. Capex for these plants totals US$14.36bn by 2026. Sibur Holding is the top company accounting for the major capacity additions in Russia.
In South America, the major ethylene capacity additions will be in Brazil, with planned and announced capacity additions of around 1.3 mtpa by 2026. Capex for these plants totals US$2.98bn. In Africa, Egypt plans to spend US$4.86bn and add a capacity of roughly 1.7 mtpa, which is expected to come on stream by 2026.
The report states that Saudi Arabian Oil Co and Exxon Mobil Corp lead among the key companies in terms of global capacity additions, with an estimated capacity addition of 4.4 mtpa (7 plants) and 3.9 mtpa (4 plants), respectively.