Benzene      

*Millions of gallons of benzene per year from naphtha reforming, toluene hydrodealkylation or toluene disproportionation, and extraction from pyrolysis gasoline fractions derived from ethylene plant cracked naphthas or heavier feedstocks.

Amoco merged with British Petroleum to become BP Amoco in 1998. In July 2000, BP Amoco Chemicals reverted to the name BP Chemicals after BP Amoco decided to adopt a new unified global brand, centered on the name BP. The new name embraces British Petroleum, Amoco, Arco and Burmah Castrol, all acquired by BP.

In late 2001, Frontier Oil Corp. announced plans to expand the El Dorado, Kan., refinery in order to increase its ability to process heavier crude oils and improve gasoline yields. In April 2002, the company closed its phenol and cumene petrochemicals units in order to increase gasoline volumes and allow for outside sales of benzene. Frontier Oil Corp. acquired the El Dorado refinery, formerly owned by Equilon Enterprises, in 1999. Equilon Enterprises is the joint venture that was formed in 1998 by Shell Oil and Texaco. In October 2001, Chevron Corp. and Texaco Inc. merged, forming ChevronTexaco Corp. As part of the merger, Texaco sold its stakes in Equilon Enterprises and Motiva Enterprises LLC to Shell Oil Company and Saudi Refining Inc., with Shell becoming the sole owner of Equilon, and Shell and Saudi Refining jointly owning Motiva. As of March 2002, Equilon Enterprises LLC was renamed Shell Oil Products US. In 2000, Tosco Corp. purchased the Wood River, Ill., Equilon Enterprises refinery from Shell Oil and Texaco. In September 2001, Phillips Petroleum Company finalized its acquisition of Tosco. In August 2002, Phillips Petroleum Company and Conoco Inc. merged to form ConocoPhillips.

Exxon and Mobil merged in 1999 to form a new entity, ExxonMobil. Chalmette Refining is a joint venture of ExxonMobil and PDVSA (Petroleos de Venezuela S.A.) that was formed in 1997 between Mobil and PDVSA.

Elf Atochem merged with TotalFina, to form AtoFina in 2000. AtoFina Petrochemicals represents the chemical operations. BASF FINA Petrochemicals, BASF and Atofina's joint venture company, formally launched the world's largest naphtha steam cracker at Port Arthur, Tex. in December 2001. The facility has 35 million gallons of benzene capacity, derived from gasoline pyrolysis.

Chevron and Phillips Petroleum merged their chemical operations into a 50-50 joint venture in 2000. The new entity is called Chevron Phillips Chemical Company. That same year, the company increased benzene capacity at their Sweeny, Tex. refinery by 30 million gallons.

In February, 2001 Coastal Corporation merged with El Paso Energy. The chemical operations still maintain their Coastal identity.

At the end of 2001, Valero Energy acquired Ultramar Diamond Shamrock, and with it, UDS’s 20 million gallon benzene unit at Three Rivers, Tex.

Profile last published 11/30/99; this revision, 11/11/02.

DEMAND
2000: 2,644 million gallons; 2001: 2,670 million gallons; 2005: 2,915 million gallons, projected. Demand equals production plus imports (2000: 28 million gallons; 2001: 18 million gallons) less exports (2000: 7 million gallons; 2001: negligible).

GROWTH
Historical (1996 - 2001): 2.4 percent per year; future 2.2 percent per year through 2005.

PRICE
Historical (1996 - 2001):

Contract - High, $1.60 per gallon, works; low, $0.70 per gallon, same basis. Current, $1.28 per gallon, same basis.

Spot - High, $1.61 per gallon, barge; low, $0.65 per gallon, same basis. Current, $1.15 per gallon, same basis.

USES
Ethylbenzene (for styrene), 51 percent; cumene (for phenol), 25 percent; cyclohexane, 14 percent, nitrobenzene (for aniline), 6 percent; alkylbenzene, 2 percent; chlorobenzene, 1 percent; miscellaneous, 1 percent.

STRENGTH
The demand for cumene, 25 percent of benzene's consumption, is projected to grow at the healthy rates of 3.5 percent per year. This is a result of a turning around in demand for the phenol derivatives: bisphenol-A and phenol based resins.

WEAKNESS
Weak styrene demand, benzene's largest end use, has dampened the benzene market somewhat. Even so, ethylbenzene growth will continue at 2.0 percent per year through 2005.

OUTLOOK
Benzene prices often fluctuate in volatile fashion, week to week, in response to anticipated supply and demand, as well as crude oil and gasoline prices. In the coming months the strong drivers for benzene pricing will be the prospect of war in the Middle East, which if it comes will drive up crude oil prices and benzene in consequence. And the continuing lagging economy, which is having the opposite effect on pricing as benzene derivative demand remains soft. Benzene growth over the forecast period is anticipated to be 2.2 percent annually.

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