Petrochemical demand in Asia to drive global naphtha demand

08-Nov-13

Global demand for naphtha will expand faster than for any other light products through 2020, spurred by rising needs of the petrochemical industry in Asia, as per the Organization of Petroleum Exporting Countries. Naphtha use in the Asia-Pacific region will grow by 22% to 4.4 mln bpd in this period, with China accounting for more than a third of the increase, OPEC said in its World Oil Outlook report today. That’s double the expected growth in demand for natural gas liquids including ethane and propane to 3.2 mln bpd. Naphtha is anticipated to be the fastest growing light product over the forecast period, especially in developing Asian countries, OPEC said. A “relocation” of the petrochemical industry from Western countries to nations in Asia will have the greatest effect on Europe, where naphtha and NGLs use will decline by 100,000 bpd in the period ending in 2020, according to OPEC. In the U.S., where fewer than 20% of ethylene plants use naphtha as feedstock, demand for the fuel will decline “marginally” as rising supplies of shale gas will sustain the production of comparatively cheap ethane and propane. In the Middle East, where petrochemical producers have used mainly ethane and propane in making ethylene, new refinery and chemical plants will start using naphtha as a feedstock, the group said. Naphtha demand is projected to double to 200,000 bpd, while demand for ethane, propane and other NGLs will rise more slowly by 18% to 1.3 mln bpd, according to the forecast.