SP Olefins, a subsidiary of SP Chemicals, has successfully started up its 650 ktpa steam cracker and was able to produce on-spec olefins.
Commenting on the announcement, Kelly Cui, Wood Mackenzie Senior Research Manager, said: “This is the first entirely gas-based cracker to begin operating in China and also the first to import U.S. ethane as a feedstock. The start-up of SP Olefins is a milestone for China in lightening its olefin feedstocks.
“SP Chemicals is an existing vinyl chloride monomer (VCM) and styrene producer in Taixing, Jiangsu province. The cracker will provide ethylene to the plant’s 500 ktpa VCM and 320 ktpa styrene production. SP Olefins will also supply around 300 ktpa of ethylene, as well as the entire 122 ktpa of propylene it produces, to the merchant market.
“The ethane import tariff from the U.S. is 2% plus an additional 5% generated by the trade war. Despite this, SP’s ethylene cost remains highly competitive compared with naphtha crackers in China. With naphtha prices increasing with the gradual rise in oil prices, gas-based ethylene production costs will remain competitive in the short-to-medium term.
“According to Wood Mackenzie’s Ethylene Asset Cost Tool, SP Olefins’ ethylene cost will be the lowest in China in 2020.”
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