MEGlobal on track to start up US plant in mid-2019 – CEO

SINGAPORE (ICIS)–MEGlobal is on track to start up its shale gas-based 750,000 tonne/year monoethylene glycol (MEG) plant in the US in the middle of 2019, its president and CEO Ramesh Ramachandran told ICIS on Thursday.

Construction of the plant at Dow Chemical’s Oyster Creek site in Texas started in August this year and “continues to progress”, said Ramachandran.

“Contracts for EPC [engineering, procurement and construction] and other third-party services will be announced in the very near future,” he said.

In July, the company had chosen US chemical major Dow Chemical’s technology for the plant.

MEGlobal is a wholly-owned subsidiary of Kuwait’s EQUATE Petrochemical Company, where Ramachandran concurrently holds the position of senior vice president.

In Kuwait, EQUATE is currently running its two MEG plants in Shuaiba at full capacity, he said.

The two plants – a 550,000 tonne/year unit and a 600,000 tonne/year unit – were previously running at lower rates at early this year because of feedstock shortage.

Meanwhile, EQUATE has completed its polyethylene (PE) debottlenecking project in Shuaiba earlier this year, “ahead of schedule”, Ramachandran said.

The company now has about 1m tonnes/year of PE production capacity at the site from about 825,000 tonnes/year previously. It produces high density polyethylene (HDPE) and linear low density PE (LLDPE) in Shuaiba.

EQUATE expects demand for its PE and ethylene glycol (EG) to grow at an annual rates of 4.5% and 4%, respectively, in spite of the global economic slowdown, Ramachandran said. 

“EQUATE participates in certain niche segments in downstream markets and our customer support, innovation and loyalty allows us to grow at these rates,” he said.

While the “cyclical portion” of EQUATE’s business has been impacted by lower oil prices, the company’s strong cost reduction and innovation programs have enabled it to mitigate and offset a substantial portion of market fluctuations, Ramachandran said.

“We will continue to remain focused on our costs. We remain confident that supply/demand dynamics will soon restore high margins to this industry,” he said.

Interview article by Nurluqman Suratman

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