The petrochemical industry is struggling with the challenge of over-supply, but its long-term prospects are positive. The main driving factor is the shift towards sustainability, which carries costs but also creates opportunities.
By James Chater
Outlook
Growth has been slowing in the petrochemicals industry. The outlook is mixed, with the Chinese economy faltering, Europe heading for recession and the USA more buoyant. Higher oil prices and geopolitical instability have not helped.
Yet chemicals and petrochemicals are not going anywhere: they are an integral part of our lives, serving both end users in household goods and a wide range of businesses: auto, hydrogen, semiconductors etc. Demand in years to come is expected to grow. Petrochemicals are set to account for over a third of the growth in oil demand to 2030 and nearly half to 2050 (1). According to the IMARC Group, the market is expected to grow 4.8% per year between 2024 and 2032 (2). Some of this growth will come from innovation as the industry shifts towards sustainability and takes measures to make more efficient use of resources. But regulation also drives up costs, and major producers have been complaining about stringent EU regulations.
Despite China’s slow-down, several new plants have been finished or are being planned or built. BASF has broken ground on two plants in Zhanjiang and the joint Verbund site with Sinopec in Nanjing; it will build a further plant in Zhanjiang. The HAPCO plant is being built, and sites using LyondellBasell technology are being built in Lianyungang, Dongming, Shaanxi
(coal-to-chemicals complex) and Inner Mongolia.
In East Asia, Aramco and Greene Tweed are building plants in South Korea, while Indian Oil approved its large complex in Paradip and is building an HDPE plant in Panipat with technology from LyondellBasell.
The Middle East continues the fast growth of previous years. Sinopec and Aramco are collaborating on YASREF in Yanbu, Aramco and TotalEnergies are building the Amiral complex in Jubail and financing has been arranged for Ras Laffan Petrochemicals, a joint venture of Chevron Phillips Chemical and QatarEnergy.
The USA continues to cash in on its shale resources, with several start-ups and ongoing construction. TotalEnergies and Borealis have doubled their PE capacity at Baystar, Texas; ExxonMobil has started up two new chemical nits in Baytown, Texas, and doubled polypropylene production at Baton Rouge, Louisiana. Chevron Phillips completed its 1-Hexene unit in Old Ocean, Texas; Dow started up units in Freeport and an HPPG plant it built with Evonik, and it will build a carbonate solvents facility on the Gulf Coast to support lithium-ion battery production.
Sustainability
This word, already used twice in this survey, is on everyone’s lips in the process industries as they adapt to the new regulatory climate designed to combat global warming; and there is scarcely a manufacturer that has not created a page on “Sustainability” on its company website. However, it is more than a buzzword: substantial pressure is being exerted by both governments and customers, many of whom are themselves subject to stringent regulatory regimes. All the major petrochemical companies are organising themselves to lower their carbon footprint by adopting the following strategies:
Recycling
This can take many forms, ranging from returning the plastic to its original use to the more sophisticated processes of breaking down plastics and transforming them into new products. An example of the investments many large companies are making can be seen in TotalEnergies. The company is building a mechanical recycling unit for plastic waste at its Grandpuits site southeast of Paris. The unit will produce 30,000 tonnes a year of compounds containing up to 50% recycled plastics. Dow and Procter & Gamble are collaborating to develop technology to convert hard-to-recycle plastic packaging into recycled polyethylene with near-virgin quality and a low greenhouse gas emissions footprint. Sumitomo Chemical plans to recycle waste plastics collected from end-of-life automobiles, following the example set by Europe, where new cars are increasingly incorporating recycled materials. BASF and Sulzer Chemtech are collaborating on developing technologies to convert plastic waste into new products. ExxonMobil is operating a new facility in Baytown to break down hard-to-recycle plastics and transform them into raw materials for new products. At the SATORP refinery in Jubail, a consortium consisting of TotalEnergies, Aramco and SABIC is converting oil derived from plastic waste into polymers. In a new plant in Frankfurt-Höchst, Germany, Arcus Greencycling Technologies pyrolyses plastic waste into a condensate that is used to produce new products.
Recycling essentials (3)
Each UK household produces a tonne of waste per year.
80% of UK household waste is recyclable, but only 45% of household waste is in fact recycled.
Most commonly recycled plastics: PET (water bottles and plastic trays), HDPE (milk cartoons and shampoo bottles) and PP (margarine tubs and ready-meal trays).
Harder to recycle: PVC (piping), LDPE (food bags) and PS (plastic cutlery).
Still harder to recycle: crisp packets, salad bags and plastic wrap.
Non-recyclable: bioplastics, composite plastic, plastic-coated wrapping paper, cling film and polycarbonate.
In general, the lower the resin count, the harder it is to recycle.
Bio-based plastics
This is an emerging industry, comprising only 1% of the plastics market. Despite concerns about competition for land use with agriculture, and the challenge of integrating them into waste management systems, there is great growth potential. Achievements so far include Coca-Cola’s bottle made of 100% plant-based plastic; Dow and New Energy Blue’s collaboration to develop bio-based ethylene from corn residue; and Sumitomo Chemical’s pilot facility (under construction) to produce propylene directly from ethanol.
Biodegradable plastic
Recycling, incineration or consigning waste to a landfill can be avoided if one makes plastics that can biodegrade or compost on its own. One of the leaders in this field is Danimer Scentific, which is collaborating with Chevron Phillips to make polyhydroxyalkanoate (PHA), synthesised from lactones produced using Danimer’s proprietary catalyst technology.
CCS / CCU
Carbon capture and storage (CCS) has become a well-established technique in several industries, ranging from steelmaking to oil & gas and petrochemicals. Carbon capture and utilisation (CCU) is relatively new. Recycled CO2 has several uses: it can be converted into polyether used in mattresses, while researchers at the UK Centre have used CO2 to make nylon. Linde and Heidelberg Materials are using BASF technology to build a CCU facility. Most of the resulting liquid CO2 will be sold as a feedstock for the chemicals industry and into the food & drink markets. Messer has just announced a CO2 recovery plant that will cater for the food & drink industry.
Fossil-free energy
An important way to reduce carbon footprint is to use fossil-free energy such as renewables, hydrogen or nuclear power. Reliance has stated it will “use solar energy to decarbonise our O2C business and use green hydrogen generated from renewable sources – and CO2 as raw materials to develop a road map for new green chemicals, green fertiliser, and e-fuels.” TotalEnergies has announced it will generate electricity from green hydrogen with an electrolyser built by VNG. Dow and X-energy are exploring the possible use of a nuclear SMR (Small Modular Reactor) as an energy source.
Stainless steel
In the chemical and petrochemical industries, stainless steel is used in storage tanks, heat exchangers, pressure vessels/reactors, cryogenic applications and tubes, pipes and fittings. Some processes test the materials to the limit: corrosion is more severe than in other industries, and pressures and heat are also elevated. The full range of austenitic and super-austenitics are used, but duplex and super-duplex grades are required for the toughest conditions. A new high-alloy super-duplex grade, SAF™ 3006, has recently been developed specifically for heat exchangers in the chemical and petrochemical industries. It will complement SAF™ 2507, introduced by Alleima in 1985 and designed to handle mainly chlorides, whereas SAF™ 3006 has been fine-tuned to handle hydrochloric, sulphuric, formic or other acids.
Another Alleima product, Sanicro® 35, combines the best features of super-austenitics and nickel alloys and can be used in chemical processing, oil & gas and other industries.
Duplex also plays a role in the production of urea, which is used as a source of nitrogen in the manufacture of fertilisers as well as serving as a raw material in the chemical industry.
Stamicarbon has recently built several of its Ultra-Low Energy urea plants, which use high-pressure equipment for the melting and prilling processes. This design applies the Ultra-Low Energy principle to the pool condenser, superseding the pool reactor technology used previously. The new design allows heat supplied as high-pressure steam to be used three times instead of two, reducing steam consumption by about 35% and cooling water consumption by about 16% compared to the traditional design. The pool condenser is made of Safurex®, a super-duplex stainless steel developed by Sandvik (now Alleima), specially designed to handle extreme corrosion (from ammonium carbamate), heat and high-pressure. Recent examples of its use are in a series of plants announced by Stamicarbon in 2023-4: in Jiangxi province, China; Zhangjiagang City, Jiangsu province, China; the African Sub-Sahara; Cairo; Shouguang, Shandong province, China; and the USA.
References
- https://www.iea.org/reports/the-future-of-petrochemicals.
- https://www.imarcgroup.com/petrochemicals-market.
- https://www.cladcodecking.co.uk/blog/post/uk-recycling-facts-and-statistics; https://www.slrecyclingltd.co.uk.
- https://www.alleima.com/contentassets/581bd499ae4e4a32af21bb86e1b320b6/datasheet-saf-3006-en-v2024-03-04-0628-version-1.pdf/download
Petrochemicals and AI
Creating a sustainable petrochemical industry depends on being able to measure performance in precise terms. Aramco and IBM are setting up an innovation hub in Saudi Arabia that will address issues such as the circular economy, material discovery, sustainability, supply chain, digitalisation and artificial intelligence, using technologies in hybrid cloud, AI and quantum computing.
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