InterviewNPRA '11: INEOS to raise US olefins, polyolefins output

27 March 2011 16:08  [Source: ICIS news]

By John Baker

SAN ANTONIO, Texas (ICIS)--With petrochemical fortunes recovering strongly in North America, INEOS is looking to increase capacity for its olefins and polyolefins offerings.

Dennis Seith, CEO of INEOS Olefins & Polymers USA, says: “We are undertaking engineering studies to debottleneck ethylene capacity at Chocolate Bayou in Texas, with a potential to add a further 115,000 tonnes/year.”

This would meet the needs of INEOS’s commitments to the US Gulf Coast merchant ethylene market, while also supporting the company’s high-density polyethylene (HDPE) unit at its La Porte, Texas, complex.

“The expansion is currently being considered”, Seith said in an interview ahead of the International Petrochemical Conference (IPC), but he believes the cost structure at the highly integrated site is at a good point for further investment.

INEOS operates two crackers at its Chocolate Bayou, complex, with combined capacity of 1.70m tonnes/year. Downstream it operates 950,000 tonnes/ year of HDPE capacity at La Porte and in its joint venture HDPE operation with Chevron- Phillips Chemical at Cedar Bayou, Texas.

It also has 815,000 tonnes/year of polypropylene (PP) capacity, at Chocolate Bayou, La Porte and Carson, California.

The cracker debottleneck would follow swiftly on the heels of a recent expansion in acrylonitrile (ACN). INEOS added a fourth reactor in late 2009 at its Green Lake, Texas, facility. The expansion boosted capacity by 10% to 540,000 tonnes/year.

INEOS is also building a major waste-to-bioethanol plant in Florida, which will produce 8m gallons of bio-ethanol and 6MW (gross) of renewable power when it comes onstream in mid-2012.

Seith is optimistic for the market overall. “Things have turned out better than expected”, he notes. The much publicised growth in global ethylene supply, from the wave of new capacities in the Middle East and Asia, has in reality come on slower than expected and appears to have been delayed further by operational issues, he points out.

As a result, operating rates have not dipped as low as they might have and now the recovery, with global GDP advancing by 3.9% last year, is driving petrochemical demand further.

Globally, Seith sees ethylene demand growing by 5%/year in the near term. In North America the situation is now looking even better. The US industry responded very quickly to the downturn, he says, and took out 2.3m tonnes/year of ethylene capacity, mainly in the form of the more expensive naphtha cracking.

Other producers reacted by increasing their ability to cracker ethane and other natural gas liquids, taking advantage of the introduction of emerging shale gas production.

“Today, the US cost position is very good, based on low cost ethane and highly productive capacity – surpassed only by the Middle East and Canada”, notes Seith. The low value of the dollar is also helping exports and he points out that the latest figures for 2010 show the US is exporting as much as 18% of its ethylene production as derivatives.

Hosted by the National Petrochemical & Refiners Association (NPRA), the IPC continues through Tuesday.

For more on INEOS visit ICIS company intelligence

By: John Baker
+44 20 8652 3214

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