Total says new Chinese facilities could erode petrochemical prices
- China set to increase output from coal-to-olefins facilities
- 12 plants have been greenlighted and are yet to come online
- Stricter emissions rules in China may curb future expansion
Increased production from Chinese coal-to-olefin plants could weigh on petrochemical prices and harm revenues for producers in the Middle East, according to the French energy company Total.
Six or seven facilities are already onstream and 12 more have been greenlighted by the Chinese government, said Jean Viallefont, Totals vice-president for Asia, speaking at an Abu Dhabi conference.
Just how much Chinese coal-to-olefin operations impact the revenues of producers in the Middle East remains to be seen, according to Viallefont.
Now Chinas government has strict criteria for emissions which must be met before projects are given the green light, he said.
Viallefont said higher standards for future coal-to-olefin plants could slow down the industrys expansion in China, something that would reduce the impact on Middle East producers.
Petrochemical producers in the Middle East are also facing increased competition from US ethane crackers, which have the advantage of an abundant supply of cheap natural gas to use as feedstock.
Totals Viallefont said state-of-the-art plant technology and economies of scale in Middle East operations may prove crucial to success amid the increasingly competitive global petrochemical market.
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