Published on February 23, 2017
India's Reliance Industries, owner of the world's biggest refining complex announced that it will halt heavy naphtha exports in 2017/18 after the full-scale start-up of its 2.2 million tonnes per year (tpy) paraxylene plant, four people with knowledge of the matter said.
The plant, located in western Gujarat state, is currently operating at about 800,000 tpy capacity, and the rest of the project's capacity is set to come on stream before the end of this financial year in March, one of the people said.
At full capacity, Reliance's paraxylene plant would require 2.7 million tonnes per year of heavy naphtha - reducing its ability to export the product and making it likely to resort to imports of heavy naphtha, the trade sources said.
"Previously, Asia was not getting much heavy naphtha but these days, Russia is able to supply heavier grades of naphtha," said one Singapore-based trader.
Of India's total 730,000 tonnes of naphtha shipped out in January, over 220,000 tonnes were from Reliance and most of it in paraffinic form.
While the short-term supply outlook for naphtha in general is tight in Asia due to India cutting back exports, refinery maintenance, outages and a lack of alternative feedstock to replace naphtha, the longer-term outlook is for oversupply.