Overview of Petrochemical Industry 7-Abhay Dalal|17-Jyoti Jagtap|27-Deepika Mhatre|37-Niranjan Parkhi|47-Nishu Kumar|57-Ajaykumar Vadher


and the so-called C4 derivatives. components of natural gas such as butane. particularly with the Middle East building its strength as a major petrochemicals supplier and China emerging as a major processing hub and end-use market for petrochemicals.Indian Petr chemical Industry Petrochemicals are the downstream of the oil and gas industry . mainly ethylene. propylene. is likely to face a slowdown in the coming 2 years owing to the global economic slowdown.the carpeting on which we walk. pharmaceuticals we need to remain healthy. currently 2 -3 percent above the average world GDP. paints we use to brighten our surroundings.and aromatics. plastic soda bottles from which we drink. Petrochemicals get their raw material . cosmetics. These feedstocks are then cracked to obtain the building blocks of the petrochemical industry: industry whose products affect our daily lives. mainly benzene. The growth of the chemical industry. The coming years are expected to see the petrochemicals industry undergoing a major metamorphosis. These products are then processed to produce a wide variety of consumer and industrial products. toluene. and the xylenes. Gl bal Petr chemical Industry Petrochemicals dominates the global chemicals market with a share of almost 40 percent. tires we rely on for transportation. Petrochemicals are a part of our daily lives . including butadiene.known as feedstocks . and some of the byproducts of oil refining processes. clothing we wear. that is. and many other applications. fertilizers that grow our crops. ¡ ¡   . such as ethane and propane.from the refinery: naphtha. The chart below shows the flow of raw materials from the Middle East to the processing hubs and end use markets of China and India from where the finished products will reach the markets of North America and Europe.

Asian markets are undergoing a sea change in the form of high demand markets for petrochemicals. 60 percent of the petrochemical growth is likely to take place in Asia. automotive. textiles. ¢ . India. with China accounting for about one -third of the growth. and the rest of Asia becoming hubs for processing of end products as well as a high demand end-use market. Asian markets also have been affected since Europe and North America have cut down on import of finished goods. By 2018. Petr chemical Industry in India The petrochemical industry has been one of the of the fastest growing industries in the Indian economy. Even though Asia is expected to soon become a significant end use market. packaging indus try. with the recent recession hitting the industry. the current world economic scenario will have a negative effect on the industry and instead of growing at about 2-3 percent above GDP. However. However. the market is expected to grow at a much lower rate. this recession will affect the Western markets more than Asian ones. It was projected that the coming years will see China. agriculture. construction. it provides the foundation for manufacturing industries such as pharmaceuticals. etc.

As shown in the figure below.9 MMTA. Polymers account for more than 60 percent of total petrochemical production. (HPL).5 MMTA. and Haldia Petrochemicals Ltd. aggregate demand for the entire petrochemical sector in India was around 20 MMTA in 2008 . (RIL) along with Indian Petrochemical Ltd. Gas Authority of India Ltd (GAIL). (IPCL). India has three naphtha. Besides. Combining the demand for all the key segments in the petrochemic al industry.The petrochemical industry in India is oligopolistic with four main players dominating the market. namely Reliance Industries Ltd. the industry has been stagnant in terms of capacity addition. there are four aromatic complexes also with a combined Xylenes cap acity of 2.and three gas based cracker complexes with a combined ethylene annual capacity of over 2. Currently.

Manufacturing and Marketing Practice and Strategie .

Phenol levels of up to 200 mg/L and benzene levels of up to 100 mg/L may also be present. butadiene. 1. and wastewater treatment are of greatest concern.500 emetric tons of alkenes (such as propylenes and ethylene). toluene. butylenes. Process wastewaters are generated at a rate of about 15 cubic meters per 3 Waste C aracteristics Fugitive air emissions from pumps. and climatic conditions. valves. Petrochemical plants also generate solid wastes and sludges.Manufacturing Practice The release of volatile organic compounds (V Cs) to air depends on the products handled at the plant and may include acetaldehyde. Petrochemical units generate wastewaters from process operations (such as vapor condensation).427 kg per metric ton of product in ABS plant. The base petrochemicals or products derived from them along with other raw materials are converted to a wide range of products including resins and plastics (such as low density polyethylene (LDPE). some of which may be    ¨   Natural gas and crude distillates suc as naphtha (from petroleum refining) are used as feedstoc s to manufacture a wide variety of petrochemicals which are in turn used for the manufacture of a variety of consumer goods The description of petrochemical processes and products presented here is for illustrative purposes only The basic petrochemicals manufactured by crac ing. acetone. agrochemicals. loading and unloading operations. 0. suspended solids (100400 mg/L). flanges.500-6. carbon monoxide. Some petrochemical plants also have alcohol and oxo-compounds manufacturing units on-site. and storm water run off. storage tanks. cooling tower blow down. equipment maintenance. pharmaceuticals. 0. reforming.000 metric tons per year ethylene production) and may contain biochemical oxygen demand (B D5) (100 mg/L).000 to 750. 0. processes which lead to the formation of oxides which are extremely toxic. dyestuff. Some of the compounds released to air are carcinogenic or toxic. solvents.6 to 10 kilograms (kg) (75% are alkanes. and xylenes).000 metric tons per year (tpy) of ethylene production. flares. synthetic fibers (such as polyester and acrylic). and polyvinyl chloride (PV )). ¥ ¨ ¥ ¤ ¦ £ ¦ ¨ © ¥ § . A typical naphtha cracker at a petrochemical complex may annually release about 2. process heaters. trichloroethylene. and butadiene) and aromatics (including benzene. COD (1. 20% being vinyl chloride. coatings. Boilers. industrial chemicals (including those used for the manufacture of detergents such as linear alkyl benzene (LAB). trichlorotoluene.2-dichloroethane.2518 kg per metric ton of product in a styrene plant. 3-10 kg per metric ton of product in a SB plant. 1. and 15% being chlorinated organics) per metric ton of product in a vinyl chloride plant. Compounds considered carcinogenic that may be present in air emissions include benzene.02 to 2. linear low density polyethylene (LLDPE). polypropylene. propylene. The capacity of naphtha crac ers is generally of the order of 250. high density polyethylene (HDPE). 20% unsaturated hydrocarbons about half of these is ethylene. and other process equipment (in some cases may include catalyst regenerators)are responsible for the emission of particulates. rubbers (including styrene butadiene rubber (SB ) and polybutadiene (PB )). and oil and grease (30-600 mg/L).2-5 kg per metric ton of product in a polystyrene plant.5 kg (45% of these being ethylene dichloride.000 metric tons per year of ethylene capacity). and other processes include olefins (including ethylene. V C emissions from a naphtha cracker range from 0. and explosives).000 metric tons of ethylene. and vinyl chloride. benzene. when producing 500. material handling and effluent treatment procedures. toluene. engineering polymers (such as acrylonitrile butadiene styrene (ABS)). and 0.000 mg/L). polystyrene. and remaining 5% are aromatics) per metric ton of ethylene. V C emissions are mostly fugitive and depend upon the production processes. and xylene. Ethylene and propylene emissions are of concern because of their fate hour (m /hr) (based on a 500. and sulfur oxides (S x) (600 metric tons per year based on a 500. A number of alternative methods are available to manufacture the desired products.1-2 kg per metric ton of product in ethyl benzene plant. nitrogen oxides (200 metric tons per year).

and other process equipment by following good design practices and equipment maintenance procedures. Recover catalysts and reduce particulate emissions. Use long life catalysts and regeneration to extend the cycle. dimethyl hydrazine. epichlorohydrin. toluenediamine. cumene. acetonitrile. However. organics that cannot be recovered. In some case. ethylene dichloride. ethyl chloride. 463 Petrochemicals Manufacturing Recycling/Reuse Recycle cooling water and treated wastewater to the extent feasible. where appropriate. where the combination and sequence of processes is usually very specific to the characteristics of the products manufactured. phthallic anhydride. Recover and re-use spent solvents and other chemicals to the extent feasible. Spent caustic and other hazardous wastes such as distillation residues associated with units handling acetaldehyde. and other process areas by  Target Pollution Loads . toluene diisocyanate. Reduction of Air Emissions Minimize the leakages of volatile organics (including benzene. are effectively destroyed by routing them to flares and other combustion devices. carbon tetrachloride. trichloroethane. aniline. Plant safety and fire prevention and control procedures should be in place adopting methods such as vapor recovery systems and double seals (for floating roof tanks). methyl ethyl pyridine. and ethylene oxide) from valves. product transfer areas. Prevent solids and oily wastes from entering the drainage system. pump glands (use mechanical seals). perchloroethylene. Specific pollution prevention or source reduction measures are best determined by technical staff. flanges. Pollution Prevention and Control Petrochemical plants are typically large and complex. chlorobenzenes. trichloroethylene. Establish and maintain an Emergency Preparedness and Response Plan. Use low NO x burners to reduce NOx emissions. Optimize fuel usage.considered hazardous because of the presence of toxic organics and heavy metals. benzyl chloride. Elimination/Reduction of Pollutants Use non-chrome based additives in cooling water. and vinyl chloride may be generated in significant quantities. Optimize tank and equipment cleaning frequency. Areas where effort should be concentrated include Improved Operating Procedures Segregate process wastewaters from stormwater systems. Accidental discharges as a result of abnormal operation especially from polyethylene and ethylene-oxide-glycol plants in a petrochemical complex can be a major environmental hazard releasing large quantities of pollutants and products into the environment. Use mechanical seals. there are a number of broad areas where improvements are often possible and site specific emission reduction measures in these areas should be designed into the plant and targeted by plant management. nitrobenzene. ethylene dibromide. Minimize losses from storage tanks. vinyl chloride.

wet oxidation. 0.06 kg. ceramic filters. Gaseous releases are minimized by condensation.. 3 Liquid Effluents Petrochemical wastewaters often require a combination of treatment methods to remove oil and other contaminants before discharge. Oil is recovered using separation techniques. A wastewater generation rate 15 m per 100 tons of ethylene produced is achievable with good design and operation and new petrochemicals should strive to achieve this.001 kg.4 kg per ton of product. or chemical treatment may also be required. and dichloroethane level of less than 0. Catalytic cracking units should be provided with particulate removal devices. granular activated carbon. and clarification. absorption. bark. product transfer points. and 0. emission factors. ethylene oxide. and bioflora for treating biodegradable organics). For heavy metals. coagulation/flocculation. Design assumptions should be recorded to allow for subsequent computation and reduction of losses. and 1. Particulate removal technologies include fabric filters. Vapor recovery systems to control losses of VOCs from storage tanks and loading areas should achieve close to 100% recovery. activated alumina. Target maximum levels for air releases of ethylene. anaerobic. and other handling equipment. biodegradation (trickling filter.2-dichloroethane are 0. Separation of different streams (such as stormwater) is essential to minimize treatment requirements. A good practice target for petrochemical complex is that the total organic emissions (including VOCs) from the process units be reduced to 0. A final polishing step using filtration. and in some cases using biofiltration and bioscrubbing (using peat/heather. suspended solids level of less than 0. precipitation. Methods of estimating these figures include ambient and emissions monitoring. and activated sludge).Implementation of cleaner production processes and pollution prevention measures can provide both economic and environmental benefits.2 kg. Treatment Tec nologies Air Emissions Control of air emissions normally includes the capturing and recycling or combustion of emissions from vents. reverse osmosis. and filtration is used. a combination of air or steam stripping. flotation/sedimentation/filtration. ion exchange. and thermal decomposition. and electrostatic precipitators. wet scrubbers. and inventories of emissions sources. 0. a combination of oxidation/reduction. and electrodialysis is used. For organics. rotating biological contactor. ozonation. silica gel. activated carbon. A typical system may include neutralization.6% of the throughput. The following production-related targets can be achieved by measures such as those detailed in the previous section.  . storage tanks. aerated lagoon. The figures relate to the production processes before the addition of pollution control measures. composts. and zeolites). adsorption (activated carbon. vinyl chloride. per 100 tons of ethylene produced.02 kg. Pollutants loads which can be achieved include a COD level of less than 1 kg.4 kg.

70% of the output of the Indian petrochemical sector constitutes polymers. Indian petrochemical sector was operated and mastered by the state-owned IPCL till the early 90s. With the rapid growth of the middle class in India.However. after liberalization. Reliance Industries. These petrochemical objects are sold through stockists. and the IPCL are the 3 major companies which can boast of having fully-integrated plants. and distributors. Indian petrochemical market today has high demand elasticity with high volume industries and the Indian petrochemical sector is a capital intensive sector. Today the Indian petrochemical market can boast of having international standards because it has the blend of low cost coupled with high class infrastructure.Marketing Strateg Petrochemical business being an oligopoly has few strong players who cater to almost the entire needs of the markets. C&F channels. IPCL and Reliance came up with large-sized plants.  . the demand for petrochemical goods is anticipated to increase manifold. Nocil. Prices are determined by international pricing and are very volatile in nature. The companies directly meet the large volume sale. and in the last few years. the growth rate of these industries has been 16-18% per annum. Nocil was the only private sector enterprise set up with modest infrastructure and capacity .

Manufacturing Process .

Once separated and purified of any contaminants and impurities. lawn mowers. Raw or unprocessed crude oil is not generally useful. aromatics. and alkynes. which are molecules of varying lengths and complexity made of hydrogen and carbon atoms. Since the lighter li uid . a modern refinery will convert heavy hydrocarbons and lighter gaseous elements into these higher value products. Instead. sweet" (low viscosity. the lighter elements form explosive vapors in the fuel tanks and are therefore hazardous. the fuel or lubricant can be sold without further processing. Octane grade of gasoline can also be improved by catalytic reforming. and as feedstock in petrochemical processes that manufacture such products as plastics. Different boiling points allow the hydrocarbons to be separated by distillation. dienes. more useful products. low sulfur) crude oil has been used directly as a burner fuel for steam vessel propulsion. which involves removing hydrogen from hydrocarbons producing compounds with higher octane ratings such as aromatics.    Manu acturing  pr cess of ships. solvents. alkenes. Crude oil is separated into fractions by fractional distillation. detergents.The fractions at the top of the fractionating column have lower boiling points than the fractions at the bottom. Smaller molecules such as isobutane and propylene or butylenes can be recombined to meet specific octane re uirements by processes such as alkylation. and a small number of oxygen atoms. and it is this variety that makes crude oil useful in a broad range of applications. naphthenes (or cycloalkanes). All of the fractions are processed further in other refining units. or less commonly. forms and lengths such as paraffins. especially in warships. dimerization. aircraft engines. automobiles. The differences in the structure of these molecules account for their varying physical and chemical properties. chainsaws. Petroleum fossil fuels are burned in internal combustion engines to provide powerfor While the molecules in crude oil include different atoms such as sulfur and nitrogen. Although "light. lubricants. the hundreds of different hydrocarbon molecules in crude oil are separated in a refinery into components which can be used as fuels. The heavy bottom fractions are often cracked into lighter. and other machines.Petrochemical Industry (Oil Refinery) products are in great demand for use in internal combustion engines. elastomers and fibers such as nylon and polyesters. the hydrocarbons are the most common form of molecules. Oil can be used in a variety of ways because it contains hydrocarbons of varying molecular masses.

Petroleum products are usually grouped into three categories light distillates (LPG. and other properties to meet product This classification is based on the way crude oil is distilled and separated into fractions (called distillates and residuum) as in the above drawing.  . at steady state or nearly steady state for months to years. diesel). The high capacity also makes process optimization and advanced process control very desirable. naphtha). longchained oil into a lighter short-chained one. Because of the high capacity. middle distillates (kerosene. Liquified petroleum gas (LPG) Gasoline (also known as petrol) Naphtha Kerosene and related jet aircraft fuels specifications. asphalt). vapor pressures. many of the units operate continuously. gasoline. heavy distillates and residuum (heavy fuel oil. wax. and hydrocracking. lubricating oils. The final step in gasoline production is the blending of fuels with different octane ratings.Intermediate products such as gasoils can even be reprocessed to break a heavy. Oil refineries are large scale plants. thermal cracking. Diesel fuel Fuel oils Lubricating oils Paraffin wax Asphalt and tar Petroleum coke processing about a hundred thousand to several hundred thousand barrels of crude oil a day. as opposed to processing in batches. by various forms of cracking such as fluid catalytic cracking.

Flow Diagram of Typical Oil Refinery .

Desalter unit washes out salt from the crude oil before it enters the atmospheric distillation unit. Liquified gas storage units store propane and similar gaseous fuels at pressure sufficient to maintain them in liquid form. butenes can be dimerized into isooctene which may The reformate has higher content of aromatics and cyclic hydrocarbons). An important by-product of a reformer is hydrogen released during the catalyst reaction. See Continuous distillation. Isomerization molecules to unit converts linear subsequently be hydrogenated to form isooctane. more valuable reduced viscosity products. Fluid catalytic cracker (FCC) unit upgrades heavier fractions into lighter. Distillate hydrotreater unit desulfurizes distillates (such as diesel) after atmospheric distillation. Atmospheric distillation unit distils crude oil into fractions. Naphtha hydrotreater unit uses hydrogen to desulfurize naphtha from atmospheric distillation.Common process units found in a refiner Visbreaking unit upgrades heavy residual oils by thermally cracking them into lighter. higher-octane branched molecules for blending into gasoline or feed to alkylation units. Steam reforming unit produces hydrogen for the hydrotreaters or hydrocracker. There are also other uses for dimerization. more valuable products.  Merox unit treats LPG. Catalytic reformer unit is used to convert the naphtha-boiling range molecules into higher octane reformate (reformer product). kerosene or jet fuel by oxidizing mercaptans to organic disulfides. These are usually spherical . Coking units (delayed coking. Must hydrotreat the naphtha before sending to a Catalytic Reformer unit. and flexicoker) process very heavy residual oils into gasoline and diesel fuel. Alkylation unit produces high-octane component for gasoline blending. more valuable products. fluid coker. Hydrocracker unit uses hydrogen to upgrade heavier fractions into lighter. leaving petroleum coke as a residual product. Dimerization unit converts olefins into higher-octane gasoline blending components. The hydrogen is used either in the hydrotreaters or the hydrocracker. For example. Vacuum distillation unit further distils residual bottoms after atmospheric distillation.

Wastewater collection and treating systems consist of API separators.vessels or bullets (horizontal vessels with rounded ends. with some sort of vapor emission control and surrounded by an earthen berm to contain spills. Amine gas treater. Claus unit. has to be buffered at the entry of the units. and tail gas treatment convert hydrogen sulfide from hydrodesulfurization into elemental sulfur. [3] Solvent refining units use solvent such as cresol or furfural to remove unwanted. boiler plants generates steam. Utility units such as cooling towers circulate cooling water. Solvent dewaxing units remove the heavy waxy . and instrument air systems include pneumatically operated control valves and an electrical substation. Storage tanks store crude oil and finished products. dissolved air flotation (DAF) units and further treatment units such as an activated sludge biotreater to make water suitable for reuse or for disposal. constituents petrolatum from vacuum distillation products . usually cylindrical. Slug catcher used when product (crude oil and gas) that comes from a pipeline with two-phase flow. mainly asphaltenic materials from lubricating oil stock or diesel stock.

Logistics & Suppl C ain Processes .

The upstream process includes the exploration. The great distances between supply chain partners The upstream supply chain involves the acquisition of crude oil. which arises from the production capabilities of crude oil suppliers. major segments the upstream and downstream supply chains. therefore. but also high inventory carrying costs in terms of safety stocks at the final customer location. and subsequently operating the  . specifically in the logistics area. customers and increase their market share and profitability. However. drilling of exploratory wells. represents a major challenge. This boom in global demand along with the ease of international trade and the inflexibility1 involved in the petroleum industry s supply chain has made its management more complex and more challenging. pipelines. meeting the broadening prospect of oil demand and its derivates while maintaining high service-levels and efficiency is a major challenge in the petroleum industry. forecasting. These logistical challenges are a major influence on the cost of oil and its derivatives. these commodities and products are transferred between locations that are in many cases continents apart. 2003. a senior manager at the consulting firm Accenture (Morton. It is divided into two different. and logistics management of delivering crude oil from remotely located oil wells to refineries. or railroads. considering the amount of inflexibility involved. The logistics network in the petroleum industry is highly inflexible. which is the specialty of the oil companies. yet closely related. Very few industries deal with that kind of complexity in shipping. The steadily increasing global demand for oil and its derivatives such as petrochemicals has enabled companies Providing these products to reach more present a high variability of transportation times that can hurt suppliers in terms of service levels and final customers in terms of safety stock costs. The long distance between supply chain partners and slow modes of transportation induce not only high transportation costs and in-transit inventory. Such constraints on transportation modes in this type of industry induce long lead times from the shipping point to the final customers location compared to other industries. As a result. and the limitations of modes of transportation. The upstream sector includes the searching for potential underground or underwater oil and gas fields. a shipment has to exploit multiple transportation modes before reaching the final customer s location. opportunities for cost savings in logistics still do exist. that are not present in most other industries.Supply chain management in the petroleum industry contains various challenges. 31). Moreover. p. the transportation process is carried out either by ships. long transportation lead times. Every point in the network. trucks. Hence. The oil and petrochemical industries are global in nature. The supply chain of the petroleum industry is extremely complex compared to other industries. In many instances. said Doug Houseman. production.

conclusively determine the presence or absence of oil or gas. production. where the crude oil is manufactured into the consumable products that are the specialty of refineries and petrochemical companies. and the logistics management of delivering the crude oil derivatives to customers around the globe. A steel pipe (casing) is placed in the hole.g. while deep water wells can cost up to USD$100 million plus. Oil exploration is an expensive. the valves regulating pressures and controlling flows. The downstream supply chain involves the process of forecasting. an exploration well is drilled in an attempt to . The downstream supply chain starts at the refinery. Features of interest (known as leads) are subjected to more detailed seismic surveys which work on the principle of the time it takes for reflected sound waves to travel through matter (rock) of varying densities and using the process of depth conversion o create a profile of the substructure.wells that recover and bring the crude oil and/or raw natural gas to the surface. high-risk operation. to provide structural integrity to the newly drilled wellbore. when a prospect has been identified and evaluated and passes the oil company's selection criteria. Typical Shallow shelf oil wells (e. Offshore and remote area exploration is generally only or undertaken national by very large corporations governments. passive regional seismic reflection surveys to detect large scale features of the sub-surface geology. natural gas seeps. magnetic Extraction of petroleum is the process by which usable petroleum is extracted and removed from the earth. Holes are then made in the base of the well to enable oil to pass into the bore. However. Exploration Visible surface features such as oil seeps. Finally. most exploration depends on highly sophisticated technology to detect and determine the extent of these deposits using exploration geophysics areas thought to contain hydrocarbons are initially subjected to a gravity seismic or survey. Finally a collection of valves called a "Christmas Tree" is fitted to the top. North sea) cost USD$10 30 Million. The oil well is created by drilling a hole into the earth with an oil rig. Challenges and opportunities exist now in both the upstream and downstream supply chains. pockmarks (underwater craters caused by escaping gas) provide basic evidence of hydrocarbon generation (be it shallow or deep in the Earth). survey.

There is usually an oil depot (tank farm) at or near an oil refinery for storage of bulk li uidproducts. This is done mainly with the help of oil tankers and pipelines. especially in warships. the lighter elements form explosive vapors in the fuel tanks and are therefore hazardous. lubricants. and can be thought of as types of chemical plants. and the limitations of modes of transportation.Delivering crude oil from remotely located oil wells to refineries. low sulfur) crude oil has been used directly as a burner fuel for steam vessel propulsion. detergents. naphtha). transportation lead times. gasoline. and as feedstock in petrochemical processes that manufacture such products as plastics. Every point in the network. such as gasoline. and li uefied petroleum gas. Although "light. asphalt base. carrying streams of fluids between large chemical processing units.Downstream Process: Oil refinery or petroleum refinery: is an industrial process plant where crude oil is processed and refined into more useful petroleum products. sweet" (low viscosity. The crude oil feedstock has typically been processed by an oil production plant. diesel). represents a major challenge . therefore. heating oil. Instead. the hundreds of different hydrocarbon molecules in crude oil are separated in a refinery into components which can be used as fuels. long useful. middle distillates (kerosene. An oil refinery is considered an essential part of the downstream side of the petroleum industry. kerosene. solvents. The logistics network in the petroleum industry is highly inflexible. Petroleum products are usually grouped int three o categories: light distillates (LPG. Raw or unprocessed crude oil is not generally Logistics management . Oil refineries are typically large sprawling industrial complexes with extensive piping running throughout. elastomers and fi bers such as nylon and polyesters. which arises from the production capabilities of crude oil suppliers. In many ways. diesel fuel. oil refineries use much of the technology of.

! Distribution and marketing . rail or barge. tanker. This classification is based on the way crude oil is distilled and separated into fractions (called distillates and residuum). The distribution of finished products is made by pipeline. heavy oil for power plants) or the retail selling through a network of service stations. Fuel retailing is similar in some aspects to the consumer products goods industry. asphalt). lubricating oils.g. heating oil. truck. this part of the business presents rather different challenges in supply chain than the refining or upstream activities.000 tons) and therefore the economies of scale are less important than in the case of bigger crude oil tankers. In the case of the network of service stations. This part of the petroleum supply chain comprises the transport of finished fuels from the door of the refinery to consumers and the sale of the products either in bulk or in small quantities in gas stations.000 tons) than in the case of crude oil(generally over 100.heavy distillates and residuum (heavy fuel oil. Therefore. wax. fuel retailing is a well differentiated part of the business where marketing strategies are critical. less focused on final consumer needs. Sales may target the direct delivery to big consumers (e. The quantities transported are smaller (typically 10 to 50..

Cost Drivers .

When the environment is concerned. There is also a notably higher percentage in productivity per worker because of the large investment in equipments. not to mention the equipment. to be able to use the energy in an efficient manner. As compared to other resource industries. The life span of this industry is infinite. . On the other hand. People working for petrochemical plants have jobs ranging from research scientists to equipment operators. Usually gaseous. the emissions are quite low per unit of output. For operation costs of a petrochemical plant. this particular industry does not generate large volumes of contaminated water. the purchase of energy and feedstock would take around 50%. generally requiring world class engineering. this industry has enough oxygen to breath.The petrochemical industry consumes some of the oil production and gas production as well. emissions can arise from production processes of the plant. the government control can also have an effect in the industry. The price of gas and oil is especially crucial to the international competitiveness of the petrochemical industry. for as long as the population continues to use and make use of such materials. the petrochemical industry made its mark in controlling unwanted emissions from the plant. from handling to storage. The technology under the petrochemical industry engages in high pressures and temperatures. and is prevented from doing so. In addition.

C allenges and SWOT Anal sis .

the challenges facing India petrochemical industry provides the industry with better tools which would in turn help the growth of the economy. The availability of new hydrocarbon resources in India has spurred the demand for petrochemicals in the country and spawned an industry that is based largely on captive and low-cost feedstock. on a positive note. There is no denying that opportunities in the petrochemicals business must be capitalized upon for growth. y Prevention of reservation on Small Scale Units y Plastic waste to be recycled and the littering habits to be discouraged y India requires advantage on feedstock. Today. the petrochemical industry is driven by size and cutting-edge technology. putting India at a competitive disadvantage in the competition with China. India's ethylene capacity is far smaller than China's and is unlikely to rise above its Asian rival's levels in the next 5-7 years. In the current competitive environment. This will make it impossible for India to develop applications further downstream. small-sized plants make no sense.The Indian petrochemical industry faces a number of challenges for sustained growth. so the import cost has to be brought down y The industry should have access to the primary amenities of infrastructure However. Following are t e c allenges facing India petroc emical industr y High cost of energy and feedstock and the impact on demand y The transformation in the kinetics of competition in manufacturing y Increase in the cost of project Problems faced b t e India petroc emical industr y The manufacturing units mostly use obsolete format of technology and are not able produce optimally y There is a necessity for the modernization of equipments y Excise duty on synthetic fiber should be rationalized $# '% & % " " " & .

GAIL and IPCL (to some extent). In the domestic markets. A low per capita consumption of 4 Kgs of plastic as compared to a global average of 20 Kgs leaves enough scope for capacity expansion resulting in ONGC and IOC venturing into the business. Indian major Reliance has recently acquired a German polyester major Trevira GmbH and this marks the private sector giant's entry into the European markets in a big way. The following are Strengt s of Indian Petroc emical industr y Large and very fast growing Indian petrochemical market y y Huge trained talent pool Competitive labour cost Weaknesses of Indian Petroc emical industr y Insufficient basic infrastructure for the petrochemical industry y High feedstock cost in comparison to Middle East countries y y Prevalence and use of old technology Synthetic fibre industry is unorganized and operates in small clusters Opportunities in Indian Petroc emical industr y synthetic fibre Huge demand for polymer and y Great opportunity for product development exists y Low consumption of polymer in comparison to global consumption rate industr y Stiff competition from other regional players like. growing activity in infrastructure and construction segments coupled with strong growth in the auto sector on the back of lower interest rates have actually boosted the performance of the petrochemicals sector. china and the Middle East countries y y Stiff rational pricing pressures Environmental hazards concerns 5 ) the major uses of the products Threats to Indian Petrochemical 0 2 4 0 ( 1 3 ( . At the same time. Major beneficiaries of this uptrend are the integrated players such as Reliance Industries. ONGC and IOC are planning entry into the business in a major way as this is in line with their forward integration plans. The petrochemicals cycle is currently on a global uptrend thanks to growing demand from China and other developing nations.SWOT Anal sis: The Indian petrochemicals industry is finally discarding its nascent stage tag and the companies are now vying for a major chunk of the global pie of the petrochemicals market.

y y Low market recognition Relocation of manufacturing sites to region with abundance of feedstock .

Conclusion .

and establishment of a series of special economic zones (SEZs) and a number of petroleum. Operating rates of major petrochemical product segments are very high presently. Two major elements in this support are the decision to allow 100 percent foreign direct investment projects in this sector. and petrochemical investment regions (PCPIRs). The major driver for the growth of petrochemical industry in India is its (India's)ongoing economic development. The refining capacity in India is expected to rise to 210-225 MMTA in 2011-12. The global economy is a dynamic and ever-growing one in spite of the high cost of energy. major downstream expansions in naphtha crackers. The strong growth in demand is not backed by a sufficient supply so the cost is still to come down.India has stably established itself in the core of the international production of petrochemical and petrochemical. translating into increased availability of 8-10 MMTA of naphtha. The olefin-based capacity is expected to increase from 5 MMTA to 10 MMTA and aromatics based capacity is expected to increase from 3 MMTA to 6 MMTA. This in turn is forging the demand for petrochemicals. the future could see more investments from multinationals as well as domestic companies. The Government has set in place policies to promote investment in the petrochemical sector.related products in the present scenario. This additional availability of naphtha has already prompted petrochemical majors to announce . With the Government announcing an infrastructure development program of over INR 500 Billion. coupled with growth in key enduse sectors like auto. With Government support slowly falling into place. chemicals. The future of the Indian petrochemicals industry is bright with domestic demand driving the market for products. and retail (packaging). and several key domestic companies have unveiled ambitious expansion plans for the next few years. personal / lifestyle products. a boost is expected in the demand for petrochemical products in India.

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