Released October 2016
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Globally, petrochemicals are frequently looked to as a means of economic diversification and value add in economies who rely heavily on oil and gas revenues. As the Canadian economy has been negatively affected by the fall in oil and gas prices, Canada’s petrochemical sector is an interesting one to look to for potential future growth.
CERI’s “Competitive Analysis of the Canadian Petrochemical Sector” examines the availability of petrochemical feedstock in Canada for the C1 through C3 value chains through 2030, and expands on CERI’s September 2015 study, “Examining the Expansion Potential of the Petrochemical Industry in Canada” to assess Canada’s competitive position in comparison to other petrochemical producing jurisdictions. Canada will see large available volumes of methane, ethane and propane through the study period, both with and without LNG projects coming online. However, both Canadian petrochemical clusters (Alberta and Ontario) are not well positioned on the cost basis against more competitive US Gulf Coast and Saudi Arabia when considering plant gate costs and government incentives.
petrochemical Studies released in 2015
Released August 2015
The Petrochemical industry in Canada is dominated by the production of ethylene from ethane and then downstream derivatives produced from ethylene. This new CERI report examines the current competitive position of Canada in terms of attracting investment for Petrochemical expansion. The sector has seen some investment in the recent past but much less than other regions globally including the US and the Middle East.
The study demonstrates that the principle consideration in determining whether a region is cost competitive is the feedstock price, and second, feedstock availability in sufficient quantity. North America has this advantage over the rest of the world. The advantage is increased when there is a large price differential between natural gas and oil. The reason is that the rest of the world uses mainly oil-based feedstocks for their petrochemical production. North America and the Middle East predominantly use natural gas.