Projects: Formosa plans $1.7bn US cracker investment

05 March 2012 00:00  [Source: ICB]

Formosa Plastics plans to invest more than $1.7bn in a new cracker, a propane dehydrogenation (PDH) unit and a low density polyethylene (LDPE) plant at its Point Comfort site in Texas, US.

The new project will be located at Formosa's Point Comfort site

The US-based company said that the cracker would have an ethylene capacity of 800,000 tonnes/year, while the PDH unit would have the capacity to produce 600,000 tonnes/year of propylene. The LDPE unit would have a capacity of 300,000 tonnes/year, it added.

Construction of the three projects is expected to be completed in 2016, with start-up scheduled for the same year, said Randy Smith, vice president and general manager of the site.

The olefins cracker will use low-cost domestic natural gas and will supply feedstock both to existing production units and to the new LDPE unit, Formosa said. The additional propylene production will increase operational flexibility, it added.

Details of the process technologies and engineering contractors were not disclosed.

The project is estimated to lead to the creation of 1,800 building jobs during the construction phase and, once completed, 225 long-term operating and maintenance jobs, the company said.

Formosa already produces polyethylene (PE), polypropylene (PP) and polyvinyl chloride (PVC) at Point Comfort, and is in the process of starting up a new specialty PVC plant at the site. "We're currently in the last stages of construction and initial start-up," a company spokesman said. He declined to reveal the size or precise timing of the specialty PVC project.

SHALE GAS BOOM

The US shale gas boom is motivating a string of producers to explore cracker projects. Four companies - Formosa, Chevron Phillips Chemical (CPChem), Shell Chemicals and Dow Chemical - have now committed to building world-scale crackers, while others have expressed an interest in building a new cracker or expanding capacity.

CP Chem plans to build its cracker at Cedar Bayou, Texas, while Shell will pick a location in the northeast US. Dow will locate its project on the Gulf coast. The projects are expected to come on line between 2016 and 2017.

By: Anna Jagger
+44 20 8652 3214

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