Thailand’s petrochemical industry

Thailand’s plans to double its petrochemical industry capacity in 2010 could face lengthy delays following a Thai court ruling at the beginning of December that dozens of construction projects along the country’s eastern seaboard must be suspended because of environmental and health impact concerns that were not fully addressed during the project planning stage.

Thailand’s Supreme Administrative Court issued its ruling, which includes more than 20 petrochemical projects among a total of 65 projects to be suspended in Map Ta Phud industrial estate in Rayong Province. The court said the 65 projects that will remain suspended must comply with Article 67 of Thailand’s new constitution, which is related to environmental protection.

Impacts of the ruling
Among petrochemical producers affected by the ruling are Thailand’s two largest petrochemicals groups, who operate all the country’s cracker facilities. All projects being developed by the Siam Cement Group will remain on hold. PTT, the other major petrochemicals producer, has been ordered to halt most of its 25 projects at Map Ta Phut, which involve approximately US$ 3.6 billion of investment.

The old constitution said that these types of industrial projects require an Environmental Impact Assessment (EIA) report while the new constitution says there is an extra requirement, a Health Impact Assessment (HIA) report as well.

Petrochemical projects affected by the court ruling form a key part of Thailand’s ambitious petrochemical industry expansion programme, which is planned to almost double the size of the Kingdom’s cracker capacity in 2010 and add a substantial volume of downstream production capacity.

Affected projects
Petrochemical related projects among the 65 affected by the court ruling include infrastructure construction schemes to support petrochemical plants as well as actual processing facilities.

PTT’s no. 6 gas separation plant is due to supply ethane to the company’s newly completed fifth cracker that is due to start up in Q1 2010. PTT Polyethylene, a joint venture between PTT Chemical and PTT plc, awarded a construction contract to Toyo Engineering Corp in mid 2006 to build the US$ 1.7 billion ethane cracker with construction of the cracker and an integrated polyethylene unit starting in May 2007.

SCG imports feedstocks for its existing naphtha cracker and will import additional naphtha supplies when the new cracker is commissioned. SCG is building its second cracker in joint venture with Dow Chemical with which it also formed a joint venture to own and operate its first cracker.

Expansion programme
The current petrochemical expansion programme represents the third phase in the development of Thailand’s petrochemicals industry. Thailand’s current third petrochemical investment wave is targeted both at the domestic market and export. Industrial expansion during the past decade has seen the development of new industrial sectors including the automotive industry, which have contributed to the growing demand for plastics and chemicals.

Southeast Asia is expected to become an increasingly important market for Thai petrochemical exporters from 2010 onwards as trade barriers come down. While exporters are hoping to increase sales of commodity products to Europe, markets in Southeast Asia take a wider range of products.

David Hayes, Hydrocarbon Engineering Contributing Editor

You can read the full article in the January issue of Hydrocarbon Engineering.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/18012010/thailand%E2%80%99s_petrochemical_industry/