Navigating the Future of Petrochemicals: Adapting to Economic and Ecological Changes | 2024 | Blog | Resources | John Crane

Navigating the Future of Petrochemicals: Adapting to Economic and Ecological Changes

June 11, 2024

5 Minute Read

The Current Situation

Macroeconomic conditions for establishing new petrochemical plants must be carefully balanced to avoid the risk of oversupply, which may lower prices and global demand. Generally, the petrochemical industry is exposed to cyclical supply-demand conditions and prices. Decisions to expand existing facilities or invest in new sites are usually made when prices are high, typically when an expanding economy is feeding demand for these products or when there is a supply shortage.

Recent world events have made it harder to identify cyclical movements within the petrochemicals industry at a global scale, introducing disruption and volatility to this cost-based industry. Expanding or establishing a new petrochemical plant requires huge capital investment, which requires the use of advanced technology and complex customized equipment and processes. While the payback period on investment is relatively long, reliability is a key driver, alongside efficiencies and low emissions. Companies that can turn disruption into opportunities by focusing on digitalization, innovation and sustainability are more likely to be profitable in the long term.

Emerging Opportunities

Companies in the oil and gas sector that use petroleum products as feedstock typically invest in sizable global petrochemical complexes. There remains a strong global demand for petrochemical products, and there is also a switch to the production of environmentally friendly end products. These added-value products are currently gaining popularity worldwide due to their ability to help reduce environmental problems. As a further incentive to influence manufacturers to change production, some governments are making entry into this sustainable new market more attractive by offering investors targeted tax breaks.

At John Crane, we have invested heavily in solutions that equip the process industries to navigate future challenges with sustainability and reliability at the forefront. Learn about the Smiths Group approach to sustainability.

The Four Stages of the Petrochemical Manufacturing Business

The petrochemical manufacturing business is normally a large-scale operation that employs many complicated and tightly interconnected industrial processes. Many oil and gas majors are integrating their operations from upstream through to downstream petrochemical production across the four main stages: Click here to view infographic.

Key trends in automotive, construction and manufacturing promise tailwinds for petrochemicals in the long term. For example, the expected increase in electric vehicles creates new opportunities for battery technologies and lightweight materials. The use of recycled content continues to increase in packaging. And in construction, customers are looking for novel solutions that create healthier, safer and more sustainable living conditions.

A Cost-Based Industry

While production cost largely depends on the prices of oil and related products, petrochemical producers who can keep costs under control have a competitive advantage. Costs can be attributed to feedstock, production overheads and significantly the production technology employed, underpinned by a growing emphasis on digitalization, innovation and sustainability. These factors remain top of the agenda at John Crane, driving customer-focused solutions, portfolio growth and consolidation.

Although there has always been a need for reliability in the petrochemical industry, there is a growing focus on asset availability and increasing mean time between repair/failure (MTBR/MTBF), which can be achieved by using digital technologies and remote monitoring.

John Crane Sense® Monitor provides real-time equipment monitoring, enabling customers to diagnose issues and take timely corrective actions. By upgrading your equipment with John Crane Sense® Monitor customers can enhance reliability, ensure the longevity of their mission-critical assets, and increase productivity.

Innovative Solutions and Service Excellence for a Winning Strategy

Innovation is essential for building a sustainable competitive advantage during disruptive times. As petrochemical companies focus on reducing costs, they should plan for creating long-term value. John Crane offers a host of energy technologies and solutions that can help petrochemical customers acquire and nurture the best combination of systems and processes—even during tough times.

John Crane’s innovative solutions for mechanical seals, seal support systems, filtration and power transmission couplings are backed by asset management solutions, maintenance and repair services, managed reliability programs and training to upskill the workforce. With our legacy of continuous innovation and shared passion for helping our customers succeed, John Crane is the ideal partner for the petrochemical industry.

Scroll to top