Europe Linear Alpha Olefins (LAO) Market

In Europe, industrial facilities involved in the production of linear alpha-olefins (LAOs) generally manufacture a diverse range of LAOs starting from butene-1 and extending to higher carbon chain lengths. The primary method utilized by most commercial LAO plants is the ethylene oligomerization process, which yields even-numbered alpha-olefins. However, certain exceptions exist within this trend.

For instance, INEOS, a global petrochemical manufacturer, has developed a proprietary process that enables the synthesis of a broad spectrum of LAOs, offering flexibility to adjust product distributions according to demand. Shell Chemicals also employs their in-house technology called Shell Higher Olefins Process (SHOP) to produce 1-butene, 1-hexene, and 1-octene. Moreover, there are specialized "on-purpose" technologies designed to produce specific olefins in significant quantities. Dow, for example, produces octene-1 using butadiene as a feedstock at their plant in Tarragona, Spain.

Europe Linear Alpha Olefins (LAO) Market Overview:

In the European market, Dow Chemical’s operates a facility in Tarragona, Spain, which accounts for a 9% share of the supply capacity. This facility is dedicated to meeting the demand for linear alpha-olefins (LAOs). Meanwhile, INEOS Oligomers operates a larger facility in Feluy, Belgium, which contributes to more than 28% of the regional supply capacity. The primary products of the Feluy facility is the production of LAOs within the C₆-C₁₈ range, with the additional capability of recycling C₄ to produce other higher olefins.

Sasol Italy S.p.A. has a plant located in Augusta, Italy, where they manufacture linear internal olefins from n-paraffins. With an annual production capacity of about 250 kt, the majority of the plant's output, approximately 90%, is used internally for the production of oxo process chemicals, linear alkylbenzene, and polyinternal olefins. Additionally, CEPSA Quimica (formerly known as Petresa) in Spain is also involved in the production of linear internal olefins from n-paraffins.

Furthermore, the Shell Group operates one of the largest facilities in the region, known as the Stanlow chemical facility, located in the United Kingdom. At this facility, the Shell Higher Olefins Process (SHOP) is employed to produce both LAOs and internal olefins. A notable feature of the SHOP process is its ability to recycle longer-chain LAOs and convert them into internal olefins. This innovative approach enhances resource utilization and improves the overall efficiency of LAO production at the facility. Another significant player in the market is Nizhnekamskneftekhim, a major producer based in Russia, accounting for over 8% of the regional supply capacity. They offer LAOs in the C₄-C₂₆ range.

Europe Linear Alpha Olefins (LAO) Production Analysis:

LAOs are primarily consumed as comonomers in the production of polyethylene, particularly in the case of low-density polyethylene (LLDPE). C4, C6, and C8 LAOs are increasingly being employed as comonomers, with C4 and C6 also finding use in high-density polyethylene (HDPE). These comonomer are typically added in proportions of up to 8-10% for LLDPE, 2-3% for HDPE, and up to 20-30% for specialty-grade polyethylenes.

C8 linear alpha-olefin, along with C10 (decene-1), C12, and sometimes a blend of these, is converted through oligomerization to produce poly alpha olefins (PAOs). PAOs serve as base stocks for synthetic lubricants. Decene-1, in particular, is the most widely used LAO. The demand for LAO in the production of PAO is growing rapidly, primarily driven by the automotive industry's requirements in the region. Western European car engines have higher compression ratios compared to those in North America, leading to higher temperatures that necessitate motor oils with improved stability.

Moreover, the major European car manufacturers are imposing stricter specifications, including higher thermal and chemical stability, lower volatile organic compound (VOC) emissions, and higher viscosity/temperature indexes for engine oils. European consumers also prefer longer oil-change intervals, often using the oil specified by the car manufacturer, which has resulted in the increased usage of 10W-40 and 5W-40 motor oil types. These oils have lower viscosities and offer improved fuel economy as they are multi-grade oils.

Europe Linear Alpha Olefins (LAO) Demand Analysis:

To meet the rising demand, manufacturers are expanding their production capacities. For example, in 2022, Chevron Phillips announced the construction of a low-viscosity PAO unit in Beringen, Belgium to address regional and global demand. This expansion will boost the company's PAO production plant in Belgium to 120 kt. The facility is expected to be operational by 2024.