New Delhi: Haldia Petrochemicals Ltd will fully shut its sole 520,000 tonnes per year (tpy) naphtha cracking plant for 75 days of expansion works starting Friday, a company official said.
The firm had earlier planned to shut the plant from mid-October to raise its capacity by about 30%.
“We have enough naphtha stock in the tankages, we want to process that before shutting down the plant. Shutdown will begin from 30 October,” the official who did not wish to be identified said.
He said that Haldia Petrochemical has sought 300,000 tonnes of naphtha from Kuwait Petroleum Corp (KPC) for December 2009-November 2010 deliveries, and 100,000 tonnes from Abu Dhabi National Oil Corp (ADNOC) for January-December 2010, but the deals have yet to be concluded.
“We hope to conclude the deal with ADNOC this week,” the official said, adding that his firm has submitted a low premium versus KPC’s offer at $17 a tonne premium to Middle East quotes on a free-on-board (FOB), which was deemed too high by traders.
“The regional (naphtha) market is going to be in surplus, as new production in Middle East is coming out. In India, naphtha demand is declining due to replacement by natural gas,” the official said.
Haldia Petrochemical also sources naphtha through Indian state-run refiners and the spot markets.
“Normally we also buy 200,000 tonne of naphtha from KPC in April-May and another 200,000 tonne in July-August, other than purchases from Indian refiners and spot markets,” he added.
Traders informed, for now, the naphtha spot market has been strengthening due to US demand for European cargoes amid low refinery runs.
South Korean crackers, with the exception of YNCC, are running at full-tilt to capitalise on Chinese demand and this has also led to the stronger sentiment.
Asian crack spreads rose to $96.96 a tonne premium on Monday, their highest since 22 September.