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The petrochemicals industry has evolved out of oil and gas processing by adding value to low

value by-products, which have limited use in the fuels industry. The industry now produces a
remarkable range of useful products, including plastics, synthetic rubber, solvents, fertilisers,
pharmaceuticals, additives, explosives and adhesives. These materials have important
applications in almost all areas of modern society. Petrochemical products are used in cars,
packaging, household goods, medical equipment, paints, clothing and building material to name
just a few of the common applications. Furthermore, the industry continues to innovate through
new technology and the ability to process different types of raw materials.

The petrochemicals industry sources raw materials from refning and gasprocessing and converts these raw
materials into valuable products using a variety of chemical process technologies. A variety of feedstocks
are used as raw materials, the industry driver being economic. If cheap feedstock is available then there
will always be somebody who is prepared to try to make a proft by making something valuable out of it.
These feedstocks are subject to a variety of processes with the aim of producing a hand-full of chemical
building blocks. These building blocks are further processed through a variety of reactions to form the fnal
petrochemical products.

The target markets for petrochemical products are smaller and more specialised in comparison
to refined products and natural gas. Although petrochemical products usually earn premium
prices compared to refined products and natural gas product, marketing is more demanding.
Market risks and competitive analysis therefore play an important role in lender assessment of
petrochemical project fnance transactions.