Modeling and Identification of Economic Disturbances in the Planning of the Petrochemical Industry

Abstract

The petrochemical industry is a dynamic industry and can be seen as a network of chemicals from basic feedstock to final chemicals. The aim of this work is to identify and model long-and short-range disturbances that affect planning of the petrochemical industry. An application to the Kuwait Petrochemical Industry was performed. The major disturbance is the oil prices that affect chemical prices and consequently profit. Future chemical prices needed for planning are predicted using three forecasting models: simple time-series fitting and two causal models with oil prices, the second-order plus dead time transfer function and autoregression with an exogenous variable models. Oil prices for the causal models are first forecasted under the concept of market long cycles (K-waves) and short cycles (business or Kitchin cycles) and then used to forecast chemical prices. The forecasted chemical prices affect the planning of the petrochemical industry where different routes in the network are selected for different final product prices. It is found that including the market cycles and using the causal models for forecasting petrochemical product prices will provide possible scenarios for chemical price forecast, and then a risk-adjusted present value can be calculated.

Comprehensive Decision Framework Combining Price Prediction and Production-Planning Models for Strategic Operation of a Petrochemical Industry

“…These primary petrochemicals have an enormous economic significance according to the types of raw materials used. For example, most petrochemical industries in Middle Eastern countries have started to use their own resources to export intermediate or final products with increasing benefits for their economies. , The petrochemical sector is predicted to be worth approximately USD 600 billion globally and is a very competitive market . Furthermore, the profit margin is very sensitive to the markets of petrochemical products.…”

Petrochemical Network Planning

“…This work was later extended by Al-Sharrah, Alatiqi and Elkamel (2003) with the aim of identifying long-range and short-range disturbances that affect planning in the petrochemical industry. This work was later extended by Al-Sharrah, Alatiqi and Elkamel (2003) with the aim of identifying long-range and short-range disturbances that affect planning in the petrochemical industry.…”

Synergy in Mergers of Petrochemical Companies within a Complex Considering Purchasing and Selling Advantage with Process Integration

“…15 Recently, many Middle Eastern countries have applied this methodology for their petrochemical industry development because they are developing a petrochemical industry using their ample resources. [16][17][18] It is important to note that the study of synergy can also be applied to process synthesis, [19][20][21][22][23][24] process design, [25][26][27][28] and process operating problems. 29,30 The synergy resulting from increasing the scale of a company generally is a consequence of increasing the market power in upstream and downstream markets and reducing the fixed cost per unit product.…”