Octane blending
Overview
Demand for high octane components vary throughout the year depending on seasonality, premium gasoline market share, and refinery performance. Stricter gasoline standards also contribute to demand for high octane components.
Among the list of high-octane components are reformate, alkylate, MTBE, ETBE, toluene, xylenes, ethyl benzene, and others. Some of these components primarily see demand from the chemical market but could be diverted to the gasoline pool if there are returns in that segment.
Each blendstock has specific octane rating and rvp content that determines its value in the gasoline pool. Gasoline blenders will look at market prices for each of the octanes and see how it relates to the value in the gasoline pool. In the summer of 2023, high volumes of ethylbenzene were diverted to the gasoline instead of the production of styrene, as styrene prices fell below ethylbenzene blend value.
MTBE is a high-octane component for gasoline blending, but only used in some countries. MTBE demand has been led by growth in Asia, Middle East, and Latin Markets. Other regions have focused on increased biofuel usage which includes ethanol and ETBE.
Argus’ experts will help you determine what trends to track and how to stay competitive in today’s ever-changing global markets.
Latest octane blending news
Browse the latest market moving news on the global octane blending industry.
Japan petchem producers urged to turn to ethane
Japan petchem producers urged to turn to ethane
Declining exports and demand signal that Japan's petchem sector is lagging behind its competitors, writes Nanami Oki Tokyo, 5 March (Argus) — Japan's petrochemical producers should convert their ethylene steam crackers to low-cost ethane rather than naphtha and LPG and should do so now before the challenges become impossible, refinery integration research association Ring says. Japan has a total cracking capacity of around 6.8mn t/yr, most of which is naphtha-fed with about 6.2mn t/yr of this coming with the flexibility to crack some degree of LPG, Argus data show (see table). Operators should turn to cheaper ethane imported from the US, Ring says, adding that it is concerned Japan's petrochemical sector is falling behind international competitors such as China , South Korea and Vietnam in a burgeoning feedstock transition to ethane. The country's petrochemical sector is already struggling from declining exports and domestic demand, pressured by regional oversupply driven by China. This has prompted Japanese firms to cut production of ethylene and other petrochemicals while focusing more on high-performance goods. But overseas competitors will catch up with Japanese technologies to generate these value-added products, so it is crucial to secure cheaper feedstock in the long term, Ring says. Switching to ethane-fed crackers could help domestic firms retain their competitiveness, with potential cost reductions of up to $400/t of ethylene output, Ring estimates. But the industry faces headwinds if it is to transition, the association says. One issue is that the companies do not have requisite funds for large-scale investments in switching to ethane that the associated infrastructure requires as a result of stagnant growth. Japanese producers with crackers — Mitsui Chemicals, Sumitomo Chemical, Mitsubishi Chemical, Tosoh and Resonac — have all posted lower profits from their basic petrochemicals divisions on shrinking margins in the past five years. The transition also requires infrastructure including storage facilities and ethane barges and ships to enable imports from the US, adding significant costs. Japanese firms are unlikely to have adequate infrastructure, let alone funding, to invest in such capacity and some, along with the country's authorities, have begun exploring converting existing facilities to alternative fuels such as hydrogen and ammonia to capitalise on anticipated growth in renewable fuels. Ring and Japan's economy, trade and industry ministry (Meti) have also expressed concern that a switch to ethane for cracking could create shortages in supplies of other basic petrochemicals other than ethylene because ethane feedstock yields mainly ethylene. Japanese companies have attempted to develop butadiene production from alternative feedstocks such as bioethanol and recycled oils for decarbonisation. But such technologies are at the early stages of development and their profitability remains hamstrung by high costs. Ring the changes Developing new propane dehydrogenation plants could help Japan prevent propylene shortfalls, but this is unlikely to be feasible given the levels of investment and acreage required at existing petrochemical complexes. The country's petrochemical producers could convert a proportion of their individual crackers to be fed with ethane in a flexible set-up instead of replacing the unit. Japanese crackers have many different components varying in age that will be difficult to replace under an ethane-only system, Ring says. It would also be preferable to diversify feedstocks for supply security, it says. Japan's ethylene production fell by 2.4pc on the year to 4.99mn t in 2024, the JPCA says, the lowest since its records began in 1999. Average cracker operating rates stood at 79.9pc last year, down by 0.9 percentage points from 2023, falling below 80pc for the first time since 2014 — when the first JPCA data on utilisation were available. Japan's petrochemical sector use of LPG fell by 13pc on the year to 1.39mn t in 2024, data from the Japan LPG Association show. NE Asia cracker cash margins Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Saudi Arabia advances two new petrochemical projects
Saudi Arabia advances two new petrochemical projects
Mumbai, 3 March (Argus) — Saudi Arabia's Ministry of Energy has approved the allocation of feedstock to set up two new petrochemical complexes in Jubail. One of the allocations granted was for a joint feasibility study to set up Saudi producer Sipchem's and major petrochemicals firm LyondellBasell's (LYB) new complex in Jubail, according to the firms last week. The joint project is expected to have a mixed feed cracker and a production capacity of 1.5mn t/yr of ethylene and 1.8mn t/yr of polymer derivates. The project is expected to utilise LYB technology for production and will be majority owned by Sipchem, with the firm having a 60pc share of ownership. A target date for the project launch was not provided, with the project still in early stages of development. Sipchem and LyondellBasell also jointly own the Al-Waha Petrochemical Company, with a 75pc and 25pc stake respectively. Al-Waha has a production capacity of 465,000 t/yr of propylene and 450,000 t/yr of polypropylene. Sipchem also announced plans to increase propylene and polypropylene production capacities by 72,000 t/yr and 150,000 t/yr respectively at the Al-Waha complex, with the expansion planned to be completed by the fourth quarter of 2026. Separately, Saudi producer Tasnee also received the Ministry of Energy's approval for feedstock allocation to establish a petrochemical complex in Jubail, according to a notice on Saudi Exchange on 26 February. The project has a target start date in the fourth quarter of 2030 and is expected to have a production capacity of 3.3mn t/yr of high-density polyethylene (PE), linear low-density PE and MTBE, as well as a thermal cracker for ethylene production. It is also expected to produce specialised products such as block co-polymer, polyether polyols and phthalate-free plasticisers. By Kabir Dweit Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Dow to idle one cracker at Terneuzen: Update
Dow to idle one cracker at Terneuzen: Update
Adds butadiene capacity London, 24 January (Argus) — Dow is postponing a planned turnaround at one of its three steam crackers in Terneuzen, the Netherlands, "due to continued weakened market conditions in the region". This will result in the cracker being idled when its legal inspection dates are reached, understood to be within the next few months. "The decision enables Dow to both navigate soft market conditions in the region and reduce expenditures in 2025, while still enabling the company to safely, reliably, and profitably meet contracted customer commitments", Dow said. Local reports citing workers suggest that the unit in question is the number 3 cracker at Terneuzen. This was expected to have maintenance in 2023, but that was previously postponed to this year and has now been postponed indefinitely. Cracker 3 is the newest unit at Terneuzen and in common with crackers 1 and 2 has a high degree of flexibility for LPG feedstocks, which Dow has repeatedly cited has supported healthy operating margins relative to naphtha-based crackers. But the site is long on cracker products and placing volumes in the market has been challenging because of overall weak demand in Europe. The length was exacerbated by the closure of local derivatives such as ethylbenzene-styrene production operated by Trinseo and cumene production operated by Olin in 2023. It has been unclear how hard the three crackers at Terneuzen have been running in the past two years. Dow's internal and contractual demand may be supported by the remaining two crackers. There is no timeline on any restart, but it is likely to be dependent on demand and investment to complete required maintenance. Terneuzen 3 has nameplate capacities of 600,000 t/yr ethylene and 300,000 t/yr propylene. The other operating crackers have a combined capacity of 1.2mn t/yr, feeding local PE production of 880,000 t/yr. Propylene nameplate capacity of these crackers is 590,000 t/yr, which is shipped to Dow and other customers via vessel or in the northwest European pipeline system. The site also has the capacity to produce up to 170,000 t/yr of butadiene. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Dow to idle one cracker at Terneuzen
Dow to idle one cracker at Terneuzen
London, 24 January (Argus) — Dow is postponing a planned turnaround at one of its three steam crackers in Terneuzen, the Netherlands, "due to continued weakened market conditions in the region". This will result in the cracker being idled when its legal inspection dates are reached, understood to be within the next few months. "The decision enables Dow to both navigate soft market conditions in the region and reduce expenditures in 2025, while still enabling the company to safely, reliably, and profitably meet contracted customer commitments", Dow said. Local reports citing workers suggest that the unit in question is the number 3 cracker at Terneuzen. This was expected to have maintenance in 2023, but that was previously postponed to this year and has now been postponed indefinitely. Cracker 3 is the newest unit at Terneuzen and in common with crackers 1 and 2 has a high degree of flexibility for LPG feedstocks, which Dow has repeatedly cited has supported healthy operating margins relative to naphtha-based crackers. But the site is long on cracker products and placing volumes in the market has been challenging because of overall weak demand in Europe. The length was exacerbated by the closure of local derivatives such as ethylbenzene-styrene production operated by Trinseo and cumene production operated by Olin in 2023. It has been unclear how hard the three crackers at Terneuzen have been running in the past two years. Dow's internal and contractual demand may be supported by the remaining two crackers. There is no timeline on any restart, but it is likely to be dependent on demand and investment to complete required maintenance. Terneuzen 3 has nameplate capacities of 600,000 t/yr ethylene and 300,000 t/yr propylene. The other operating crackers have a combined capacity of 1,200,000 t/yr feeding local PE production of 880,000 t/yr. Propylene nameplate capacity of these crackers is 590,000 t/yr, which is shipped to Dow and other customers via vessel or in the northwest European pipeline system. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
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