India likely to remain a naphtha exporter until decade-end

25-May-16

India is expected to remain a net naphtha exporter over the next 4-5 years despite the spectacular growth in domestic demand, as expansion plans in the pipeline can only absorb a part of the surplus the country is currently producing. Domestic demand for naphtha witnessed the sharpest growth among all oil products in 2015, and is set to increase further in the coming years as India pushes forward to become a manufacturing hub. But domestic naphtha supply is expected to outweigh demand growth, at least over the next few years, said Kamal Nanavaty, Secretary General of India's Chemicals and Petrochemicals Manufacturers' Association and President at Reliance Industries. "Naphtha exports will continue for a while until there is new home for all the naphtha that is being produced in the country," he said on the sidelines of the recently concluded Asia Petrochemical Industry conference. Nanavaty said as not many naphtha-fed steam crackers are expected to come online over the next five years, the country will have to keep looking overseas to sell its surplus, although exports are likely to be lower. "We have a surplus now of about 6 million-7 million mt of naphtha. So we will need about three or three-and-a-half crackers to absorb all those volumes," he said, adding that each cracker with a 1 mln mt/year capacity can absorb about 2.2-2.3 mln mt/year of naphtha.