India s Current Position in the Petrochemicals Industry

Transcription

1 India s Current Position in the Petrochemicals Industry 6 th Annual Platts Asian Petrochemicals Markets 2017 April 19-20, 2017, Shanghai, China K.K.Jain, Executive Director (Petrochemicals-Projects) 1

2 Agenda IndianOil Important Pillar of Indian Economy Petrochemical World Changing Landscape Resurgence, Emergence, Divergence Asia s trades development India : A Force to Reckon Mega Trends fuelling Growth India Petrochemical Industries Production & Consumption Feed Stock Options Conclusion 2

3 IndianOil: Fueling Billion Lives Largest commercial enterprise 26 affiliated companies Employees > Networth US $ 11 bn Turnover US$ 61 bn PAT US$ 1.59 bn Largest Refiner Largest marketing Infrastructure Largest Pipeline Network IndianOil Total Refineries Capacity, Mbd

4 IndianOil: Business Space Refining Marketing Pipelines R&D 11 out of 23 refineries country 1.6mbpd capacity > 4,000 Touch Points 88 mn LPG customers 577 mn bbl POL sales 46.7% market share 11,200 km Crude, Product and Gas pipelines Over 1.6 mbpd pipeline capacity Product formulations Development of Lube, Refining, NANO-tech, AE technologies developed in-house 384 Active Patents Petrochemicals Exploration & Production Natural Gas Alternate Energy 2 nd largest player Exports > 80 countries Naphtha Cracker SBR LAB Domestic: 8 blocks Overseas: 7 blocks (Includes 10% stake in integrated upstream & LNG project in Canada) Co-promoter in M/s Petronet LNG Ltd. R-LNG marketing CGD in 2 GAs Building LNG terminal at Ennore, Tamil Nadu Wind : 69.3 MW Solar: 5 MW 4000 ROs solarized scale-up capacity to 260 MW by 2021 Total Refining Petrochemicals Planned Investment till Billion USD 19 Billion USD 4 Billion USD 4

5 Changing Landscape Global disruptions leading to major shift in trade dynamics Resurgent US Shale Gas Revolution making US net exporter Cheap feed stock Ethane & NGL availability Attract investment into Ethylene derivatives Divergent China Shifting towards lower carbon energy mix Continue trying new feed stock options Moving toward self sufficiency & may turn from importer to exporter Emergence Middle East Increased financial burden under low oil scenario Leveraging feed stock resources for value addition Export of Petrochemicals India the consuming centre Fastest growing economy: will overtake US to become 2 nd biggest economy (PPP) by 2040 Double digit Petrochemicals growth Strong Transport fuel demand 5

6 India A Force to Reckon 1/6 th world population Largest two-wheeler manufacturer 18.5 Million 2 nd largest textile capacity 1.54 Million ton 2 nd largest producer of food in World 270 Million ton 4 th largest energy consumer 700 Million ton oil equiv 3 rd largest refining capacity 230 MMTPA 5th largest passenger vehicle market 4.53 Million >1 Billion mobile subscribers 6

7 India: The Growth Engine Major countries projected Growth INDIA CHINA US WORLD India ( 7.9 Bn USD) is projected to overtake US by 2040 in PPP to become 2 nd largest economy Source:PWC, world in India Population Growth POPULATION IN MILLIONS More than 70% population below 40 Yrs Source:WorldOMeter 25 thrust sectors to push manufacturing: Automobiles Chemicals Oil & Gas Food Processing Digital India Construction 100 Smart Cities 65 Million new House by

8 India Refining capacity Growth Healthy Growth in transport fuel SKO ( 8 MMTPA) demand getting replaced by LPG * PVT PSU Total Refinery Cap 330 MMTPA by 2025 through capacity revamp Mega Refinery at west coast 8

9 India Polymer Growth Trend * Includes LL + HD+ LD+ PP+ PS+ PVC+ Ex-PS India bulk Polymer consumption of 7.6 kg/capita (excluding recycled polymers) far below world average of 35kg/Capita Polymer consumption accounted 7% CAGR during past 7 years Imports tripled in past 8 years, 15% CAGR In Terms of Petrochemical Capacity, India is at where China was 15 years ago 9

10 Petrochemicals Derivatives import India Petrochemical imports in & Year Capacity kta Demand kta % Import Dependence Petrochemical Derivatives: Opportunity yet to be tapped 10

11 C1 Derivatives: Supply demand Outlook CAGR : 4.2% CAGR : 5,7% ACETIC ACID Demand growth primarily driven by Acetic- Anhydride & PTA Majority of present production through Fermentation route Source: Nexant METHANOL Demand driven by Pharmaceutical, Formaldehydes & Acetic Acid Restricted natural gas availability Power generation and Fertiliser production priority for NG allocation Methanol to Olefins remains untapped 11

12 C2 Derivatives: Supply demand Outlook PE* : HDPE+LLDPE+LDPE CAGR : 6.7% CAGR : 9.5% PVC* : PVC+EDC+VCM CAGR : 6.5% PE & MEG OPAL & ROGC commissioning in Temporarily surplus situation in PE W.C. Refinery to reduce deficit in PE and MEG PVC Deficit 9.8 % No new Capacity addition Ethylene & Chlorine availability at one place Power availability Source: Nexant demand 12

13 C3 Derivatives: Supply demand Outlook CAGR : 8.6% CAGR : 9.0 % CAGR : 8.5% PHENOL & POLYOLS Old sub capacity plant in operation 200 KTA plnt announced in Pvt. sector PSU evaluating putting up capacity ACRYLATES No Cap at present PSU putting up 190 KTA plant Another plant under study Manali Petro & BASF with small Cap Expansion & New cap planned Source: Nexant 13

14 Polypropylene & PTA: Supply demand Outlook CAGR : 6.7% CAGR : 8.3 % POLYPROPYLENE Surplus 1040 KTA Addln Cap by PSU evaluating putting up > 4000 KTA Capacity PTA Present Surplus 1200 KTA plant announced in Pvt. sector PSU evaluating putting up capacity Source: Nexant 14

15 Other Petrochemicals: Supply demand Outlook CAGR : 5.2% CAGR : 8.0 % CAGR : 3.7 % STYRENE No capacity PSU studying putting up plant TOLUENE No Capacity Import cheaper LAB Almost balanced situation One plant of 120 KTA for long run Source: Nexant 15

16 Petrochemical feed stock requirement Feedstock Requirements for top imported Petrochemicals in Product Quantity Ethylene Propylene Benzene Chlorine CO/Syngas PVC+ EDC + VCM MEG PE PTA Phenol PP Polyol Styrene Methanol Acetic Acid VAM EVA LAB TOTAL Naphtha (for C2 & C3) Total Naphtha (For Olefins + Aromatics) Petcoke (for Methanol) 8732 Kerosene (for LAB) 1821 Common Salt: 5840 KTA *Almost 6 World-scale Crackers are required to fulfill the Ethylene capacity (6* 4 Bn USD = 24 Bn USD) Aromatic Naphtha Kerosene 16

17 Petrochemicals: Naphtha Export SPREAD: $/TONNES NAPHTHA EXPORT TREND, KTA QTY, KTA 8,309 8,592 8,048 6,885 7,302 5,974 DATA SOURCE;PPAC 4,185 2,735 3,104 3,314 2, At Current prices, Naphtha Crackers competitive with Gas Cracker India turned net exporter w.e.f Value sufficient for 2 Naphtha cracker Naphtha export from scattered locations but largely concentrated in West 17

18 India: Petrochemicals drivers Epicentre of Growth Transport 6-10% double digit Low Naphtha prices favours Olefin cracker Pet coke / Coal availability Stable and majority Govt. after two decades Conducive policy for industrial growth Make In India Focused infrastructure development 100 Smart Cities Reform of fiscal measures Simplification of FDI Approval process Goods & Services Tax (GST) roll out by June

19 Petrochemicals: Feed stock Options Naphtha Pooling Two World scale crackers Release Naphtha through NG replacement One World scale cracker Release SKO through higher LPG penetration Convert into ATF / HSD and release Hy. Naphtha Pet coke ( 15.0 MMTPA) / Coal utilisation ( 600 MMTPA) Condensate based cracker ( Mbbl/day by 2020) Reform of fiscal measures Expansion / New Petrochemical refinery Existing refineries expansion with Petrochemicals (100 MMTPA) Mega Petrochemical Refinery 19

20 Conclusion With market of > 1 Bn consumer with increasing purchasing power, local manufacturing is a compelling idea GDP growth will be maintained at 7% + in near term Stable majority Govt. in place after two decade Policy conducive to industrial growth. Make in India Digital India Growing Middle class and large consumer base India a favourite investment destination Industrial peace in most part Great Opportunity to put up Petrochemicals Plant 20

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