Chemicals sector feels the pressure of attacks on oil facilities

The global petrochemical supply chain is braced for the fallout from the weekend attacks on the world’s biggest crude oil processing plant in Saudi Arabia. (Reuters)
Updated 17 September 2019

Chemicals sector feels the pressure of attacks on oil facilities

  • Now petrochemicals industry which relies on crude oil and natural gas to make different kinds of plastic

LONDON: The global petrochemical supply chain is braced for the fallout from the weekend attacks on the world’s biggest crude oil processing plant in Saudi Arabia.

The attacks shut down about 5.7 million barrels per day (bpd) of oil production, sending the price of crude rocketing on Monday. Now the petrochemicals industry which relies on crude oil and natural gas to make different kinds of plastic, is also feeling the impact.

“With associated gas supplies badly disrupted due to the acute pause in oil production after the drone attacks, ethane supply is particularly under threat, which in turn means ethylene supplies would be interrupted too,” said Wood Mackenzie Head of Polyesters Salmon Lee.

Several major Saudi petrochemical producers, including SABIC, Tasnee, Yansab and Saudi Kayan have disclosed curtailed feedstock supplies in the wake of the attacks on the Abqaiq processing plant, which processes crude from the Ghawar, Shaybah and Khurais fields.

Saudi petrochemical plants tap natural gas, known as ethane, to make building block petrochemicals such as ethylene, from which many types of plastic are manufactured.

Spot prices of petrochemical including monoethylene glycol (MEG) and polyethylene (PE) have jumped in Asia.

Saudi Arabia accounts for about 10 percent of the global supply of polyethylene, which is used to make everything from plastic bags to milk cartons.

The Kingdom exported about 87 percent of its production to global markets in 2018.


Malaysia to study impact of India’s planned trade action

A truck carrying oil palm fruits passes through Felda Sahabat plantation in Lahad Datu in Malaysia's state of Sabah on Borneo island, February 20, 2013. (REUTERS)
Updated 3 min 51 sec ago

Malaysia to study impact of India’s planned trade action

  • Malaysia’s key imports from India include petroleum products, live animals and meats, metals, chemicals and chemical products

KUALA LUMPUR: Malaysia’s Prime Minister Mahathir Mohamad said his government will monitor the trade situation with India, which is reported to be considering trade curbs on the Southeast Asian nation over his criticism of actions in Kashmir, news wire Bernama reported.
Government and industry sources told Reuters last week that New Delhi is looking for ways to limit palm oil imports and other goods from Malaysia, in retaliation for Mahathir’s speech at the United Nations in September when he said India had “invaded and occupied” Jammu and Kashmir. Malaysia had said it did not receive “anything official” from India.
Mahathir said on Sunday his government will “study the impact of the action taken by India,” the government-owned Bernama said.
“They are exporting goods to Malaysia too. It’s not just one-way trade, it’s two-way trade,” Mahathir was quoted as saying in the report.
India is the world’s biggest importer of edible oils, and is the biggest buyer of Malaysian palm oil. It bought 3.9 million tons of Malaysian palm oil in the first nine months of 2019, according to data compiled by the Malaysian Palm Oil Board.
Malaysia’s key imports from India include petroleum products, live animals and meats, metals, chemicals and chemical products.