2020 refining and petrochemical challenges in focus

Emerging shale gas and light tight oil from the US may become global gamechangers, Mr Anon Sirisaengtaksin, Chairman, PTT Chemical International, told an audience at Downstream Asia 2013 today.

Speaking at the plenary session, Mr. Sirisaengtaksin shared his 2020 vision of the global landscape for the refining and petrochemical industry – and highlighted challenges including environmental sustainability and population growth. He said growing health consciousness and urbanisation continue to be key drivers behind global demand for chemical products.

Interconnectivity between the East and West will accelerate the impact of the shale gas evolution in US on the global petrochemical feedstock structure.

Mr Sirisaengtaksin urged industry players not to ignore how a shift from the conventional naphtha to gas-based feedstocks could lead to an oversupply of lighter chemical products such as ethylene derivatives, driving prices and revenue downwards.

Similarly for the global refining industry, Mr. Sirisaengtaksin highlighted that the “global crude slate will get lighter, driven entirely by growth of light tight Oil in the US”. Light distillates such as gasoline will dominate the supply chain over diesel.

Addressing concerns of an oversupply of gasoline in the future market, Mr. Sirisaengtaksin suggested leveraging the opportunities provided by an integration of refining and petrochemical complexes. Instead of exporting the excess supply, companies can convert gasoline into feedstocks to serve the needs of their petrochemical facilities.

Mr. Sirisaengtaksin said that in addition to integrated facilities, better management of investment, close proximity to feedstocks, and portfolio diversification were some of the integral components of a competitive business model.

With shale gas and light tight oil playing a more prominent role in the years to come, Mr. Sirisaengtaksin concluded that “it is time for players to prepare to defend markets, develop growth platforms, participate in Asian growth markets, and build skills and scale.”

BY : Ong Yu Hui