News Focus: US cracker expansions amount to 33% of existing US ethylene capacity

18 June 2012 00:00  [Source: ICB]

US-based ExxonMobil Chemical's announcement of a new 1.5m tonne/year cracker in Baytown, Texas, by 2016 brings the growing tally of new US ethylene capacity announcements to 33% of existing capacity.

ExxonMobil's new ethane cracker on the US Gulf Coast will provide ethylene feedstock for two new 650,000 tonne/year high-performance polyethylene (PE) lines at the company's nearby Mont Belvieu plastics plant.

START-UP IN 2016

The "world-class" project, due to start-up in 2016, will include premium product facilities at the ­integrated Baytown complex and capitalize on the North American shale gas boom, according to the company.

US Ethylene table

ExxonMobil has filed permit applications with the US Environmental Protection Agency and the Texas Commission on Environmental Quality, with government reviews and approvals ­expected to take around a year.

The company will make a final investment decision following completion of the government's reviews and approvals, said spokesperson Margaret Ross.

"ExxonMobil Chemical estimates exports could increase significantly as a result of the expansion," said Ross. "The proposed investment reflects ExxonMobil's continued confidence in the natural gas-driven revitalization of the US chemical industry."

ExxonMobil's move - with its planned top-of-the-line 1.5m tonne/year cracker - could dissuade others from building world-scale crackers of their own in the US for fear of overcapacity. Adding a third of the existing large capacity base in the US is likely to cause a supply-driven downturn in the petrochemical sector, especially as the large bulk of the capacity is set to come on in the relatively short time span of 2016-2017.

SURPRISE MOVE

The latest move surprised many. Back in March 2011, ExxonMobil Chemical CEO Stephen Pryor said at the International Petrochemical Conference hosted by the NPRA (now the American Fuel and Petrochemical Manufacturers) that the firm would embark on debottlenecking rather than build a new cracker.

With ExxonMobil's announcement, the total planned additional ethylene capacity in the US now amounts to 8.89m tonnes/year, or 33.4% of existing US ­capacity which would come on by 2017, according to an analysis by ICIS.

Ethylene expansionsThis includes new crackers, expansions, debottlenecks and restarts. ExxonMobil joins a crowded field of companies planning new crackers in the US - Chevron Phillips Chemical, Shell, Dow Chemical and Formosa Plastics.

Sasol is undertaking a feasibility study for a 1.0-1.4m tonne/year cracker at its Lake Charles, Louisiana, site, with the study targeted for completion by the second half of 2013.

The Sasol announcement is included in the total ICIS tally at an estimated 1.2m tonnes/year for its proposed cracker.

Other companies that have said they would consider building or partnering on world-scale crackers in the US include Saudi Arabia-based SABIC, Brazil's Braskem, Thailand-based companies Indorama and PTT Global Chemicals, Mexichem, US-based Occidental Chemical (OxyChem) and US-based start-up firm Aither Chemicals. These are not included in the ICIS analysis.

OxyChem is "still exploring all options" for a US cracker and expects to decide by the end of 2012 or early 2013, said president Chuck Anderson at the American Chemistry Council Annual Meeting in Colorado Springs, US, on June 5.


By: Joseph Chang
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