Page 13 - DMEA Week 11 2020

DMEA POLICY DMEA
customers have visibility of the price so they can plan accordingly.
“As announced in November 2019, ADNOC remains firmly committed to mov- ing from its current retroactive pricing mech- anism to a new forward pricing mechanism for its flagship Murban crude oil. This will be traded on a new independent exchange, ICE Futures Abu Dhabi (IFAD), which is expected to launch after the necessary regulatory approvals are obtained.
“As planned, we remain committed to cre- ating and maximising value from across our
portfolio, while we advance our smart growth strategy.”
Last week MEOG reported on ADNOC’s lowering of the price of its flagship Murban crude by $11.70 per barrel from $67.80 per bar- rel in January to $56.10 for February. The UAE’s largest producer was following Saudi Arabia’s lead in offering discounts to buyers after the col- lapse of the OPEC+ pact.
This and other output boosts will be a fresh blow to an oil market being hammered by the rapid spread of coronavirus and weak global eco- nomic activity.™
PETROCHEMICALS
Petchem market to be worth $7tn by 2027: TMR
MIDDLE EAST
Integration of
fuel refining and petrochemicals production will be a key trend.
THE petrochemical products market is expected to be worth around $7 trillion by 2027, accord- ing to a study published by Transparency Market Research (TMR) earlier this month. The Middle East is expected to play a major role in the sec- tor’s development.
Petrochemicals investments in Gulf Cooper- ation Council (GGC) countries, which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, topped $140bn in 2019, TMR has said. Saudi Arabia in particular is looking to expand its downstream capabilities to offset crude oil dependency. To help build up its petro- chemicals industry, national oil company Saudi Aramco is preparing to take a 70% stake in lead producer SABIC for $69bn. The deal recently secured EU regulatory approval.
The integration of fuel refining and petro- chemicals and polymer production is set to be a major trend between now and 2027, providing refiners with a hedge against weak growth in gas- oline and diesel, TMR said. The petrochemicals market serves as a backbone to a number of cru- cial industries including automotive, healthcare, agriculture, textiles and consumer durables, but a risk comes from end-users looking for more eco-friendly alternatives.
Among the major Middle Eastern projects underway is Aramco’s crude oil-to-chemicals (CTC) investment in Yanbu, due to start produc- ing 9mn tonnes per year (tpy) of petrochemicals and base oils starting in 2025.
The petrochemicals market is divided up into demand for ethylene, propylene, butadiene, ben- zene, xylene, toluene, vinyls, styrene and meth- anol. Demand for propylene will likely increase at a compound annual growth date of close to 5% between 2019 and 2027, according to TMR. Polypropylene production will account for the
largest share of new propylene consumption, followed distantly by propylene oxide, cumene, and acrylonitrile.
Ethylene is one of the biggest petrochemi- cal segments worldwide. It was primarily used to produce polyethylene and ethylene oxide in 2018, and this is likely to remain the same throughput the period.
Methanol’s single largest outlet is set to remain formaldehyde synthesis, although other major ones include olefins production, dimethyl ether (DME) and methyl tert-butyl ether/methyl tert-amyl ether (MTBE/TAME).
The global market was highly fragmented in 2018, TMR said, and this will remain the same during the period. But by forging partnerships across the entire value chain, operators will be able to enhance their competitiveness. The big- gest players in petrochemicals include BASF, Shell Chemical, DuPont, Total, ExxonMobil, Sinopec, Saudi Arabian Oil, Sumitomo Chemi- cal, Dow, Chevron Phillips Chemical and Lyon- dellBasell Industries. ™
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