Petrochemicals are set to account for more than a third of the growth in oil demand to 2030, and nearly half to 2050, ahead of trucks, aviation and shipping, according to a new report released by the International Energy Agency on Friday.
"Petrochemicals are rapidly becoming the largest driver of global oil consumption," said the report titled The Future of Petrochemicals.
They are also poised to consume an additional 56 billion cubic meters (bcm) of natural gas by 2030, equivalent to about half of Canada’s total gas consumption today.
According to the report, the sector currently accounts for 14 percent (13 million barrels per day) and 8 percent (300 bcm) of the total primary demand for oil and natural gas, respectively.
"At the same time, currently dominant sources of oil demand, especially passenger vehicles, diminish in importance thanks to a combination of better fuel economy, rising public transport, alternative fuels, and electrification," it said.
As for capacity additions, the agency estimates that countries including China and the U.S. will see the largest additions in the near term while Asia and the Middle East lead growth in the longer term.
The U.S. is expected to increase its global market share for ethylene (steam cracking) to 22 percent by 2025, up from 20 percent in 2017, according to the report.
"Along with the Middle East, the U.S. has a feedstock advantage in its access to low-cost ethane owing to its abundant natural gas supplies," it said, adding this advantage allows both regions to gain the lion's share of ethane-based chemical exports in the short and medium term.
The IEA estimates coal-based methanol-to-olefins capacity in China to nearly double between 2017 and 2025, providing the material inputs for its large domestic manufacturing base.
In the longer run, Asia and the Middle East are both estimated to increase their market share of high-value chemical production by 10 percentage points, while the share coming from Europe and the U.S. is forecast to decrease.
The IEA also estimates that India, Southeast Asia and the Middle East will together account for about 30 percent of global ammonia production by 2050.
By Hale Turkes