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Demand for naphtha decreases as gas based chemicals increase

A rapid swing in chemicals feedstock use is set to upturn refinery operations worldwide

Rising shale gas and oil output has transformed the US’ chemicals industry – but with consequences for refiners worldwide. As US low-priced, gas-based chemicals production goes up, the demand for naphtha – a chemicals feedstock in much of the rest of the world – is set to decline elsewhere. At the same time, rising tight or shale oil and gas production in the US is bringing more naphtha to market, turning a once-scarce stream into a substantial surplus. Only eight years ago, the chemicals industry in the US was generally believed to be on its last legs as local feedstock costs were high and rising while facilities in the Middle East profited from heavily subsidised gas. But the US is now one

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