OxyChem awards contract for proposed 1.2bn lb/year cracker in US

09 October 2012 18:55  [Source: ICIS news]

LONDON (ICIS)--US petrochemical producer Occidental Chemical (OxyChem) has commissioned CB&I for the basic engineering design of a proposed cracker that will produce 1.2bn lb/year (544,000 tonnes/year) of ethylene, the US-based engineering firm said on Tuesday.

The contract includes the licensing, basic engineering and front-end engineering and design (FEED) aspects of the project. Feedstock for the cracker will be ethane derived from domestic shale gas, the company said.

The announcement follows the recent signing of a memorandum of understanding between OxyChem and Mexican chemical company Mexichem to evaluate the potential construction of a 500,000 tonne/year ethane cracker at OxyChem’s Ingleside, Texas facility.

Under the terms of that agreement, the ethylene produced at the proposed cracker would be used by OxyChem at Ingleside to produce 1m tonnes/year of vinyl chloride monomer (VCM), to be sold to Mexichem under a long-term supply agreement. The VCM would be used in the production of polyvinyl chloride in Mexico, according to Mexichem.

The proposed joint venture was announced amid long-running delays to a proposed joint venture between Mexichem and Pemex for the Mexican state petroleum company to supply Mexichem with VCM. The joint venture was originally intended to be approved by the first quarter of 2012.

OxyChem did not immediately respond for a request for comment regarding whether the plant outlined in the CB&I announcement is the same as the one discussed in the Mexichem MoU.

The 500,000 tonne cracker discussed in the OxyChem/Mexichem joint venture would be likely to cost over $1bn (€770m), according to a Mexichem executive.

($1 = €0.77)

By: Tom Brown
+44 208 652 3214

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