The pandemic has boosted numbers of refinery-linked renewables projects whilst causing delays and cancellations to traditional petrochemicals projects, according to an ICIS analyst.
With lockdowns causing a rapid collapse in demand for transport fuels, oil refiners are now questioning the need for investments in mega petrochemical projects as recycling and the sustainability agenda have continued to accelerate during the pandemic.
Michael Connolly, senior consultant with the ICIS global refining team said: “Decisions have been fast-tracked by the pandemic. Where people previously were unsure about these transitions, the pandemic has shown how quickly demand can be reduced. This has been a catalyst for people to make these decisions.”
He pointed out that there have been several cancellations and delays to petrochemical projects this year.
“Pressure on virgin petrochemicals from recycling and the circular economy has created concerns about some of these mega investments. This is hindering some refiners from making that final decision to transition from traditional oil products to petrochemicals,” he said.
Many oil refiners had been refocusing on petrochemicals as a source of future growth as they forecast declining demand for transport fuels. Now, refiners have been spurred on to the transition to renewables by the pandemic.
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