Price and market trends: Chevron Phillips Chemical breaks ground on new US ethane cracker

14 April 2014 00:00 Source:ICIS Chemical Business

Chevron Phillips Chemical held on 2 April 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,” 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 noted.

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

Chevron phillips plant Chevron phillips

 Chevron Phillips Chemical

The new cracker will have a capacity of 1.5m tonne/year

Companies have announced 10 planned 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.”

POLYETHYLENE PROJECTS

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.

By Al Greenwood