Chevron Phillips Chem breaks ground for 1.5m tonne/year US cracker

02 April 2014 20:38 Source:ICIS News

Construction at CP Chem siteHOUSTON (ICIS)--Chevron Phillips Chemical held on Wednesday a ground-breaking ceremony for its new 1.5m tonne/year cracker at its Cedar Bayou complex in Baytown, Texas, the first one to be built in the US in more than a decade.

"It's a trailblazing project," company CEO Peter Cella said.

The ethane cracker will supply the company's two new polyethylene (PE) plants, for which it should hold another ground-breaking ceremony on 17 June, Cella said.

Chevron Phillips is among several companies that are taking advantage of growing supplies of US ethane, made possible by the advent of shale gas.

Companies have announced 10 new crackers − on top of several expansion projects.

Chevron Phillips, though, was the first to secure all the permits necessary for the plant, which the company expects will give it a first-mover advantage, Cella said.

The company announced feasibility studies for the plant in March 2011, and the Chevron Phillips board approved the project in October 2013.

The company awarded the engineering, procurement and construction (EPC) contract for the cracker to a joint venture, USGC Petrochemicals Project, which is made up of JGC (USA) and Fluor Enterprises.

Chevron Phillips expects the plant to be finished in 2017.

The cracker is among several projects that Chevron Phillips is undertaking.

The company is building a 250,000 tonne/year 1-hexene plant, and it may expand normal alpha olefins capacity at Cedar Bayou.

A decision on the expansion project could be made in the second quarter, Cella said.

Despite these derivative projects, Chevron Phillips intends to remain an ethylene supplier, he said. "We like being an ethylene supplier, and we want to remain an ethylene supplier."

Chevron Phillips other major derivative projects are the two PE plants that it is building at its Sweeny complex in Old Ocean, Texas.

One plant will have a 500,000 tonne/year capacity of bimodal high-density PE (HDPE). The plant will use Chevron Phillips's Advanced Dual-Loop technology.

The other new plant will produce 500,000 tonne/year of metallocene linear low-density PE (LLDPE).

Chevron Phillips awarded the EPC for the PE plants to a joint venture made up of Technip USA and Zachry Industrial.

Chevron Phillips already has plants that use these two PE technologies, Cella said. However, these plants were retrofitted. Moreover, they are not world scale.

The two plants in Old Ocean will be the first world-scale plants that use this technology, Cella said.

Chevron Phillips is targeting domestic markets for these two PE plants, according to Cella. Currently, the company exports less than 20% of its PE. That mix should stay the same after the plants start operation.

The metallocene LLDPE stands out because of its clarity, printability and puncture resistance, important qualities for packaging, Cella said. The bimodal PE is soft while still withstanding pressure.

Altogether, the PE plants and the cracker represent a significant investment for Chevron Phillips Chemical, Cella said.

The value of the project is $6bn, he said. The value of Chevron Phillips's global assets is $10bn.

Moreover, the new cracker represents a 40% expansion of the company's ethylene capacity, Cella said. Likewise, the two PE plants represent a 40% expansion of the company's current capacity of the resin.

US PLANNED ETHYLENE EXPANSIONS BASED ON SHALE GAS
Company C2 capacity Downstream Location Start-up
NEW CRACKERS
Chevron Phillips Chemical 1.5m tonnes HDPE, LLDPE Cedar Bayou, Texas mid-late 2017
ExxonMobil Chemical 1.5m tonnes PE Baytown, Texas Late 2016
Dow Chemical 1.5m tonnes LDPE, other PE, EPDM, elastomers, LAO (JV) Freeport, Texas 2017
Sasol 1.5m tonnes LDPE, LLDPE, EO, MEG, detergent alcohols Lake Charles, Louisiana 2017
Formosa Plastics 1.0m tonnes LDPE, MEG Point Comfort, Texas Q1 2017
Formosa Plastics 1.2m tonnes NA Louisiana NA
Occidental Chemical/Mexichem 544,000 tonnes EDC, VCM Ingleside, Texas 2017
Axiall/Lotte World-scale MEG Louisiana 2018
Shell World-scale PE, MEG Monaca, Pennsylvania 2019-2020*
Odebrecht World-scale PE Wood County, West Virginia NA
EXPANSIONS
INEOS 115,000 tonnes NA Chocolate Bayou, Texas 2014
Williams 273,000 tonnes NA Geismar, Louisiana Apr 2014
Westlake Chemical 82,000 tonnes NA Calvert City, Kentucky Q2 2014
LyondellBasell 363,000 tonnes NA La Porte, Texas mid-2014
Chevron Phillips Chemical 91,000 tonnes NA Sweeny. Texas 2014
Westlake Chemical 113,000 tonnes NA Lake Charles, Louisiana 2014
LyondellBasell 113,000 tonnes NA Channelview, Texas 2015
LyondellBasell 363,000 tonnes NA Corpus Christi, Texas Late 2015
Huntsman 19,300 tonnes EO Port Neches, Texas NA
BASF Fina Petrochemicals NA NA Port Athur, Texas 2014
* ICIS estimate
Source: Companies, ICIS analysis

By Al Greenwood