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MOSCOW (MRC) -- Total has
disclosed that it is evaluating construction of a new gas cracker at its Deasan,
South Korea, joint venture (JV) with Hanwha Chemical, reported Chemweek.
The company in its strategy and
outlook presentations in New York on 24 September, said that petrochemicals are
a major feature in the company’s future investments. Speaking about the segment,
Bernard Pinatel, president/refining and chemicals at Total, said that the
company is focusing on growing petrochemicals, not refining. The petchems
market, he said, is growing at 3%/year, driven by demographics, growing world
population, the emergence of the middle class and megatrends around lightweight
materials. "All of this drives the growth in plastics and polymers."
Pinatel says that there are three main principles the company adheres to
when considering expansion: access to low-cost gas feedstock, including ethane,
propane, and butane; balance between monomers and polymers in any given project;
and investing in low-carbon solutions by leveraging biofuels, biopolymers, and
embracing the circular economy. "Today, the petchems market is in a short-term
imbalance because of new capacities coming onstream on the US Gulf Coast and in
Asia…We have the first wave in the US investments coming onstream in the 2017–20
period, so the bulk of it is almost beyond us. But this weighs heavily on the
supply and at the same time on the demand. We see a slowdown most notably linked
to the trade war between China and the US, so short term, this market is
suffering from some kind of imbalance," he said.
For Total, this is not
so much of a concern because most of its projects are due to start up post-2020.
Total operates six global petrochemical platforms and the new investments will
rely on low-cost feedstock, competitive capex by leveraging the company’s
platforms, and by balancing capacities between monomers and polymers.
The company is developing four major petchems projects: in the US, South
Korea, Algeria, and Saudi Arabia. At Daesan, South Korea, the JV is investing
USD1.3 billion to add 400,000 metric tons/year - a 40% increase - to its steam
cracker capacity, using propane feedstock shipped from the US, which will give
the company an extra 400,000 metric tons/year each of polyethylene (PE) and
polypropylene (PP) capacity by 2021. The Daesan operation has been a tremendous
success, delivering cashflow of USD1 billion in 2018. "We are so happy with
Daesan that we are evaluating new opportunities there, notably a new gas
cracker, which will benefit from the platform’s synergies." The downstream
product slate is still being developed.
Total is also happy with its
operations in Saudi Arabia, where it is a partner with Saudi Aramco in Satorp
(Jubail). Satorp, a 62.5/37.5 JV between Aramco and Total, currently includes a
refinery and an aromatics complex, which started up in 2014. It has on average
provided USD1 billion/year in cashflow since 2015. The 4,000 b/d refinery was
debottlenecked by 10% in 2018 and the JV plans to increase the capacity to 4,800
b/d by 2024. "We now plan to further integrate with petrochemicals." Aramco and
Total have announced plans to invest USD5.5 billion in a new petchems complex at
the site, which will include a
1.5-million metric tons/year (MMt/y) steam cracker and a 1 MMt/y PE plant. The
project is currently in the front-end engineering and design (FEED) phase and
the final investment decision (FID) is due in 2021. Completion is targeted for
2024. This is a very attractive project and has already attracted downstream
investors. Ineos will invest USD2 billion in specialty chemicals and Daelim is
also a partner.
Referring to the US, Pinatel said that Total has very
good assets there and a profitable base providing USD1 billion of cashflow last
year. A JV in which Total has 50% and Nova and Borealis 50% is developing a 1
MMt/y ethane cracker. The project is 70% complete and will start up in 2021,
post the first wave. "We are also investing in a new PE line by 2021, fully
integrated with the cracker. Total brings integration and synergies with our
platform, Borealis its Borstar technology and Nova its market presence. We are
well on track to start up in 2021."
Total is also developing a
USD1.4-billion propane dehydrogenation and PP complex at Arzew, Algeria, in
partnership with Algeria’s state-owned oil company Sonatrach. The facilities
will be designed to produce 600,000 metric tons/year each of propylene and PP.
The project is in FEED phase with FID due in 2021.
Ethylene and
propylene are feedstocks for producing polyethylene (PE) and polyprolypele
(PP).
According to MRC's ScanPlast report,
Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine
months of 2019, up by 7% year on year. Shipments of all PE grades
increased. The estimated PP consumption in the Russian market was 976,790 tonnes
in January-September 2019, up by 4% year on year. Shipments of PP block
copolymer and homopolymer PP increased.
Total S.A. is a French
multinational oil and gas company and one of the six "Supermajor" oil companies
in the world with business in Europe, the United States, the Middle East and
Asia. The company's petrochemical products cover two main groups: base chemicals
and the consumer polymers (polyethylene, polypropylene and polystyrene) that are
derived from them. |
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