US Chevron focuses on key chem projects to improve downstream ops

28 October 2011 19:00  [Source: ICIS news]

HOUSTON (ICIS)--Chevron is focussing on key chemicals and lubricants projects as it seeks to further improve the performance of its downstream portfolio, an executive with the US-based energy major said on Friday.

“We are optimising our business focus, moving investment into higher-return business segments,” Mike Wirth, Chevron’s executive vice president, down stream and chemicals, told analysts during the company’s third-quarter results conference call.

Wirth highlighted four key chemicals and lubricants projects, two of which are being realised by Chevron Phillips Chemical (CPChem), Chevron’s petrochemicals joint venture with ConocoPhillips.

In Saudi Arabia, Saudi Polymer achieved mechanical completion and is on track to start up a 1.2m tonne/year ethylene cracker and associated derivative units, Wirth said. Saudi Polymer is a joint venture between CPChem and Saudi Arabia’s National Petrochemical.

Wirth also said that Chevron is confident on CPChem’s plans for a world-scale ethane cracker on the US Gulf coast that would run on ethane extracted from US shale gas.

“CP Chem has a very strong existing position in this market, and a competitive advantage in the ability to run a lighter feed slate, with more ethane than the industry in general,” Wirth said.

“We are confident that CPChem has a leg up on the right kind of project to deliver strong returns,” he added.

Also in the US, Chevron made a final investment decision on its planned 25,000 bbl/day  base oil plant at Pascagoula, Mississippi. When completed in 2013, the plant will make Chevron the world’s leading supplier of premium base oil, Wirth said.

In addition, Chevron plans to further expand its Oronite specialty chemical and lubricants additives plant in Singapore, he said.

Meanwhile, Chevron has signed agreements in Spain and Africa for the sale of non-core downstream assets, and it is in final negotiations for additional asset disposals in the Caribbean

This year, Chevron exited downstream operations in 21 countries, primarily in Africa, the Caribbean and Central America, Wirth said.

Chevron also sold its refinery in Pembroke, Wales, along with related marketing assets in the UK and Ireland - a deal that resulted in gains of about $500m (€350m) in the company's 2011 third quarter.

($1 = €0.70)

For more on CPChem, Chevron and other producers visit ICIS company intelligence

By: Stefan Baumgarten
+1 713 525 2653

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