• Value-added industries associated with natural gas are rapidly driving petrochemical and fertilizer industries
• Petrochemical industry, chemical fertilizers, and specialised chemical products will account for more than half of the growth in global demand for oil and gas in 2030
• The future of investment in petrochemical sector and fourth generation chemistry is promising
In our modern world, we use on a daily basis — directly and indirectly — products manufactured from petrochemicals, which are chemicals derived from petroleum and its derivatives or natural gas.
Basic and specialised petrochemicals are used in all types of daily products such as plastics, fertilizers, packing bags, electronic devices, medical equipment, detergents, tires, and even energy panels. Solar, wind turbines and parts of electric vehicles are thus an integral part of our modern life.
Petrochemicals are among the largest drivers of demand for natural gas, especially the ethylene feedstock for polyethylene.
Therefore projects to maximise the added value of natural gas contribute to providing the necessary production inputs to a large number of important and strategic industries, including petrochemical, fertilizer, pharmaceutical, iron and steel industries, cement, petroleum additives, aluminum, gas conversion to liquids and high-quality refined derivatives such as diesel fuel without lead, aviation fuel with a single characteristic, and oil.
The value-added industries are processes of manufacturing and converting natural gas as an input in industries.
In this case, the value of calculating natural gas as a final product with a value is improved, such as converting gas into ammonia and then into urea and ammonium nitrate fertilizers. Thus the value of the final product becomes much better than the value itself.
Natural gas, as gas only, and the same is the case when converting methanol, ethylene or propylene, which is used in the petrochemical, paints and dyes industries.
Research shows that global investment in petrochemicals is expected to reach $60bn in 2022 and may reach $150bn by 2030.
The availability of cheap ethane and LPG from conventional or shale oil production, as well as natural gas and shale gas, has provided attractive returns for petrochemicals and industries.
The US is increasingly exporting the raw material — ethane — to Europe, India and China, where it is processed into various petrochemical products.
In China, the investment trend is concentrated in new oil refineries, which in turn integrate with petrochemical facilities in the same location, where there is strong demand for gasoline, plastics and polypropylene.
It is worth noting that most international companies and some national companies have huge investments and joint ventures in Asia, especially in refining operations.
And petrochemicals is an excellent area to diversify assets and secure a market for the export of oil, gas and petroleum derivatives, as the risk of these projects is much lower than the risks of exploration and exploration for oil that are not commercially secured and linked to political geography. And the material return is higher in these projects, especially in emerging and developing markets in Asia.
Therefore, investing in these future projects using source feedstocks, whether from oil, petroleum derivatives or gas in the future is an important matter.
And it is preferable to plan for it through an internal project strategy in partnership with the private sector or with international or Asian companies in these emerging markets through funds.
Forecasts show the global demand for oil, its derivatives, petrochemical gas, fertilizers, petroleum additives, and iron are a major driver of future demand, methods of sale and marketing mechanism.
Transformation is a major challenge in the industry as a lot of petrochemicals will be produced using gas.
The International Energy Agency (IEA) expects that global demand for oil will continue to rise in the coming decades to 105mn barrels per day by 2040, from 93.9mn barrels per day in 2016.
The value-added gas industries include car bodies, paints and paints, plastic industries and medical supplies, and sometimes the return from using natural gas is better than exporting it, especially in light of the conditions of low prices as a result of the coronavirus pandemic.
The use of natural gas in the value-added industries is beneficial in the industrial operations and its expansion, as well as in providing employment opportunities, which explains that the “added value of natural gas is approximately three or higher” used in a group of industries, including fertilizers, petrochemicals, conversion into liquids and heavy industries.
An essential factor in the industrial formation (by about 90% for both plastic industries), the interior and exterior structures of cars, as well as materials for painting and fertilizers industry in all components of urea, phosphates and nitrogenous, point out that it is a basic component of 90% in the manufacture of urea fertilizers.
Experts opine that the fertilizer industry is one of the important industries currently because it is related to agriculture, specifically food and agricultural materials.
This is a strategic area during the current period of pandemic with the spread of coronavirus and the significant slowdown of trade and industry around the world.
It is time to focus on core areas that enhance competitiveness and emerge from the crisis in a more robust manner.
It is imperative for companies operating in this industry to benefit from the lessons learnt, improve their operational efficiency and reduce costs by creating a joint strategy between them in terms of operational integration in production stations and facilities, as well as establishing a single marketing umbrella that brings together all these companies and one executive leadership that implements the strategy of the unified board of directors for these companies.
The mechanism for marketing oil and its refined derivatives is completely different from the mechanism for marketing petrochemical and specialised products, fertilizers, methanol and other chemical products.
The affairs of unrestricted marketing and selling that follow these consolidated companies are better than those of the parent company, as it is universally recognised.
They can also study the changing behaviour of end consumers as a result of the pandemic. This as an important opportunity to improve their product offering, meet the needs of new customers, and focus on innovation.
In the end, the coronavirus crisis and the deterioration of oil and gas prices confirmed once again the importance of moving towards more diversification in the economy and focusing on chemicals with added value that have proven their important role in providing unique solutions in the field of having a higher degree of immunity against market disruptions as they are less affected by fluctuations in the oil and gas prices.
n Saad Abdulla al-Kuwari graduated in Chemical Engineering from Qatar University and obtained an MBA in Oil & Gas from Liverpool University. He was appointed CEO of Tasweeq in 2010. During his career, he has occupied several key positions in refining projects and processing, oil, gas and refined products, storage tanks and export terminals operation. He also has considerable experience in the field of Gas Processing Operations. He was also manager of Gas, Oil Petrochemical Marketing in QP Marketing Directorate for several years.
from Gulf Times https://ift.tt/3hd53sx
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