Latin American naphtha cracking projects put on hold

18 Jun '12

2 min read

Several new naphtha cracking projects that were planned to be constructed in Latin American countries are either put on hold or being reviewed due to increased shale gas production in the US, which has attracted investments in new ethylene projects and increased the competitiveness of the US.

“Enhanced shale gas production in the US has definitely increased competitiveness of the country’s ethane derivates,” Mr. Raul Arias, Senior Consultant and Manager for Latin America at Nexant, told fibre2fashion.

“Many of the naphtha cracking projects in Latin America, which were planned prior to the global economic meltdown and the new shale gas scenario in the US, are under review or on hold,” he states.

Bolivia, Brazil, Colombia, Peru and Venezuela – all have active projects involving crackers (including those on hold or under review) or have made announcements of plans or agreements to evaluate one, according to Mr. Arias.

Comparing the scenario during pre and post global economic crisis, Mr. Arias says, “Before the global economic crisis rocked the world, the scenario was: no investments in the US naphtha cracking sector, the US was expected to become a net importer of ethane derivates, Latin America was making big plans based on cost-advantaged feedstocks and was looking North for exports.”

“Now, the scenario is: the US is aiming to become one of the most competitive producers of ethylene, and is building crackers and plants to produce ethane derivatives. It is also expected to soon look South, among other directions, for exports,” he adds.

ExxonMobil Chemical, Dow Chemical, Shell, Chevron Phillips Chemical and Formosa Plastics are among the companies that are setting up new naphtha cracking projects in the US.

Expansions or plant modifications in order to add ethane consumption capacity and increase ethylene production have been made by INEOS, LyondellBasell, Williams, Westlake and Nova.

Fibre2fashion News Desk - India

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