MOSCOW (MRC) -- India's Reliance Industries, owner of the world's biggest refining complex, will halt heavy naphtha exports in 2017/18 after the full-scale start-up of its 2.2 MMtpy paraxylene plant by end-March, four people with knowledge of the matter said, as per Reuters.
The plant, located in western Gujarat state, is currently operating at about 800,000 tpy capacity, and the rest of the project's capacity set to come on stream before the end of this financial year in March, one of the people said. The petrochemical is primarily used in polyester and polyethylene terephthalate (PET).
The main feedstock for paraxylene is heavy naphtha, a crude-based product which can also be converted into reformates, a blending component for high-octane gasoline.
At full capacity, Reliance's paraxylene plant would require 2.7 MMtpy of naphtha -- reducing the firm's ability to export the product and making it likely that the Indian conglomerate will have to resort to imports of heavy naphtha, the trade sources said.
The people declined to be identified because they were not authorized to discuss the matter publicly. Reliance did not immediately respond to Reuters' requests for comments.
Traders said they expect Reliance to import about two medium-range vessel size a month of heavy naphtha if they do resort to buying the product.
"Previously, Asia was not getting much heavy naphtha but these days, Russia is able to supply heavier grades of naphtha," said one Singapore-based trader.
While the short-term supply outlook for naphtha in general is tight in Asia due to India cutting back exports, refinery maintenance, outages and a lack of alternative feedstock to replace naphtha, the long-term view is that the feedstock will be in excess.
"The global market for naphtha will be over-supplied until at least 2020," IHS Markit said in a report, projecting global demand for naphtha (including natural gasoline) to be 1.18 Bt in 2017.
As MRC informed previously, in April 2015, RIL successfully put into operation two plants in Dahej, Gujarat, India. The first is a polyethylene terephthalate (PET) resin plant, which consists of two lines with a combined manufacturing capacity of 650 KTA. This is one of the largest bottle-grade PET resin capacity at a single location globally, and consolidates Reliance’s position as a leading PET resin producer with a global capacity of 1.15 MMTPA, the company said. PET resin from the new capacity would find application in packaging for water, carbonated soft drinks, pharmaceuticals and other food and beverages.
Reliance Industries Limited (RIL) is an Indian conglomerate holding company headquartered in Mumbai, Maharashtra, India, and is one of the world's largest producers of polymers (polypropylene, polyethylene and polyvinyl chloride). Reliance owns businesses across India engaged in energy, petrochemicals, textiles, natural resources, retail and telecommunications. Reliance is the second most profitable company in India, the second-largest publicly traded company in India by market capitalization and the second largest company in India as measured by revenue after the government-controlled Indian Oil Corporation.
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