The petrochemical industry stands as a cornerstone of modern industrial sectors, with raw materials constituting a significant portion of its operational costs. Accounting for approximately 80% of expenses, the diversity and cost-effectiveness of these raw materials are pivotal in determining the industry’s competitiveness. As the primary source of intermediate goods and raw materials, the petrochemical sector plays a vital role in various downstream industries.
Operating within the realm of the ‘carbon world,’ the petrochemical industry specializes in the conversion of heavy and long-chain carbon compounds into fundamental chemical components like plastics, fertilizers, and fibers. This intricate process relies heavily on carbon-based materials sourced from a diverse array of plant and fossil resources found in nature.
Tracing the evolution of the petrochemical sector is essential in comprehending the significance of raw materials within its framework. Post-World War II, countries such as the United States, Japan, and European nations spearheaded the establishment of the petrochemical industry, leveraging technological advancements to fuel industrial growth. This move was pivotal in supplying materials for emerging technologies.
The 1973 Oil Crisis stands as a watershed moment in the industry’s history, witnessing a substantial spike in petroleum prices and underscoring the critical importance of naphtha—a raw material derived from petroleum. The subsequent surge in oil prices prompted a shift in petrochemical investments towards the Middle East and Gulf countries, renowned for their abundant reserves of raw materials.
The collapse of the Berlin Wall in 1989 marked a pivotal shift in global dynamics, leading to a redirection of investments towards high-demand regions in Asia, particularly China and India. However, the landscape evolved once again with the advent of new technologies in the United States, enabling the cost-effective production of ethane—a raw material derived from shale gas. This technological breakthrough spurred a resurgence of petrochemical investments in the US, with approximately 15 million tons of investments based on ethane as a raw material established over the past decade.
Initially, petrochemical products were derived from edible sources. Sugarcane was a commonly used raw material. Interestingly, in today’s petrochemical industry, there is a notable shift towards utilizing edible resources as raw materials. The use of bio-based materials, particularly those derived from edible sources, has gained significant attention in the context of sustainability in recent years. Leading oil companies like SOCAR are actively engaged in research and development in this area. They have made substantial progress in producing bio-based ethylene, propylene, polyethylene, and polypropylene using bio-naphtha.
The petrochemical industry’s shift to industrial production originated from using fossil resources as raw materials. Naphtha, a crucial product obtained through refining crude oil in refineries, served as the primary raw material for the petrochemical sector, enabling the production of fuels like LPG, gasoline, diesel, jet fuel, and fuel oil.
The petrochemical industry has undergone significant transformations with the widespread use of methane and ethane, derived from natural gas, as primary raw materials. Regions rich in natural gas resources, including the Middle East, Gulf countries, and the United States, have experienced a surge in petrochemical investments due to the cost advantage of these raw materials. These investments have predominantly focused on utilizing ethane as a primary feedstock for the production of ethylene and its various derivative products.
Let’s delve into the functioning of the petrochemical industry. A petrochemical complex typically consists of two main facilities: an ethylene plant and an aromatics plant. The products manufactured in these plants serve as the foundational raw materials for other factories. Hence, the extent of ethylene production capacity determines the magnitude of petrochemical involvement. Worldwide, the overall ethylene capacity stands at approximately 200 million tons. Light naphtha serves as the primary feedstock in the ethylene plant, while heavy naphtha is utilized in the aromatics plant. Notably, naphtha holds a significant advantage over other raw materials as it yields valuable by-products like propylene, C4, and pyrolysis gasoline alongside ethylene, and it finds application as a raw material in the production of aromatics.
Liquefied Petroleum Gas (LPG) is composed of propane and butane gases. It is used for heating, as a fuel for vehicles, and as a raw material in the petrochemical industry. PETKİM, in its ethylene plant, utilizes LPG as a raw material alongside naphtha, with approximately 20 percent LPG content. When LPG is used as a raw material, it increases the production of by-products such as propylene and C4.
