April 2018

Trends & Resources

Industry Perspectives: China holds nearly half of all petrochemical projects in Asia

Over the past decade, the Asia-Pacific region has been the leader in total active projects in all sectors of the downstream processing industry.

Nichols, Lee, Hydrocarbon Processing Staff

Over the past decade, the Asia-Pacific region has been the leader in total active projects in all sectors of the downstream processing industry. Developing nations in the region have made significant investments to increase downstream production capacity to meet increasing demand for transportation fuels and petrochemicals. The demand for petrochemical products will continue for the foreseeable future, led by China and India. Both countries have growing populations with increasing disposable incomes that demand more refined fuels and petrochemical products.

To help mitigate imports and to satisfy robust demand, many Asia-Pacific nations are investing in the expansion and debottlenecking of petrochemical units, as well as on the construction of grassroots petrochemical complexes. These capital-intensive investments include increased integration between refining and petrochemical facilities to increase efficiency and value.

The Asia-Pacific region accounts for nearly 40% of active petrochemical projects globally. The region’s petrochemical production capacity increases will be led by China, followed by India (FIG. 1). China accounts for nearly half of all active petrochemical projects in the region, and is continuing to invest heavily in its petrochemical sector to satisfy increasing domestic demand. A sizable portion of China’s new petrochemical capacity will be built in conjunction with refining and petrochemical integrated complexes. In total, China will add nearly 15 MMtpy of new ethylene capacity by 2025 through various production routes. The nation’s domestic ethylene capacity is forecast to increase to 35 MMtpy–40 MMtpy by the mid-2020s.

FIG. 1. Total active petrochemical project market share in Asia-Pacific. Source: Hydrocarbon Processing’s Construction Boxscore Database.

India is investing substantial capital in new petrochemical capacity to meet surging domestic demand. Indian petrochemical producers are planning to invest approximately $35 B to boost petrochemical production. Much of the nation’s new petrochemical capacity will be integrated into existing refining operations or through grassroots integrated complexes.

Additional countries, such as Indonesia, Malaysia, South Korea and Vietnam, are making substantial investments to increase their petrochemical product offerings. HP

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