China may soon have to confront scarcity of naphtha for its domestic ethylene plants, if it does not diversify its petrochemical feedstocks.
Addressing the China Petroleum and Chemical International Conference in Tianjin, Yan Kefeng, a Director at IHS Cera, said if all new ethylene plants in China rely on naphtha like the present ones, the country would soon have to face severe scarcity of naphtha.
Naphtha is China's main petrochemical feedstock. In fact, hydrocracker tail oil, raffinate and naphtha together make up over 80 percent of the feedstock required for ethylene production in the country.
Several new ethylene plants are being set up across China, but the domestic naphtha production is not likely to grow at same pace as ethylene capacity.
Thus, if all upcoming ethylene facilities too depend on naphtha for their key feedstock, the country would be confronting a shortage of over 20 million tons of naphtha by 2018, the industry researcher said.
He said that in order to tackle the situation, China must diversify to use of other feedstocks. For instance Sinopec Corp, an oil firm is planning to diversify to use more of condensate as feedstock, he added.
According to Yan, though there are possibilities of emergence of coal-based feedstocks like MTO (methanol-to-olefins), but it is not yet certain as there are some issues like environmental impact and constraints of coal and water resources.
He opined that the gas industry, in future, would emerge as a key factor in complementing the petrochemical feedstock requirement, but no accurate assumptions can be made at present as it is only recently that the country has embarked on shale gas exploration.
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