Demand for naphtha is estimated to dip in Thailand as more petrochemical firms plan to switch from the costly feedstock naphtha to cheaper gas. New Thai olefin plants are increasingly using ethane as their raw material, as gas prices are more stable than naphtha prices. Naphtha prices move in tandem with oil prices, which have currently been very volatile.
To benefit from this cost advantage, Thai PTT, has been using gas instead of naptha for over three years. The company's olefins production capacity is currently pegged at 1.7 mln tpa, up from 1. mln tpa in 2006. PTT plans to build a one mln tpa ethylene plant using gas as fuel, scheduled to be complete in Q4-09.