Issue 9/2016 - Global Chemicals Quick Facts

Global Chemicals Quick Review

NGLs in North America will stimulate the expansion of oil and gas midstream investment

According to the latest report of the Interstate Natural Gas Association (INGAA), in the next 20 years, North American oil and gas midstream companies need to invest $471 billion ~ $621 billion in infrastructure to keep up with the production of
natural gas, crude oil and natural gas liquid products (NGLs).
It is reported that during 2015~2035, infrastructure investment for NGLs transmission, fractionation and export in North America will require 43 billion ~ 55 billion US dollars
.
The study, titled North American Oil and Gas Midstream Infrastructure to 2035, considers two extremes: a best-case scenario in which a rebound in global economic activity will spur natural gas and oil consumption, driving prices higher; In the worst-case scenario, a slowdown in the pace of economic recovery will reduce demand for oil and gas and pipeline development
.

Global chemical M&A transactions are expected to reach a new high in 2016

In the past six months, the global chemical M&A market has announced four mergers and acquisitions with a transaction value of more than 10 billion US dollars: the merger of Dow Chemical and DuPont, the acquisition of Air Liquide by Air Liquide and the acquisition of Airgas in the United States, the acquisition of Syngenta by ChemChina, and the acquisition of Valspar by
Sherwin-Williams.
According to a recent report by A.
T.
Kearney, a Chicago-based consulting firm, global chemical M&A transactions are expected to reach a record high
in 2016.
According to the company, the total value of the top ten M&A deals that have been announced but not yet completed in the current global chemical M&A market is about $155.
6 billion
.
If all 10 major M&A deals are completed this year, the global chemical M&A deal volume this year will exceed the all-time high of $151 billion set in 2011
.

Global LNG demand will still grow

At a liquefied natural gas (LNG) industry conference in Perth, Australia, in mid-April, Chevron CEO John Watson said global gas demand is expected to grow 35 percent over the next 20 years, but development costs need to be contained
.
Global gas demand will remain strong
in the coming decades.
"To meet demand, we will need an LNG project
similar to Gorgon every year for the next 20 years," he said.
He was referring to the company's $54 billion huge LNG export project, which has begun exporting LNG from Australia's
west coast in recent weeks.
But he added that LNG costs remain high in Australia and that the energy industry needs to work to keep costs
under control if it wants to meet global gas demand.
Since the partners began implementing the project in 2009, the cost of the Gauguin project has increased
significantly.