Formosa Confirms US Cracker Plans

Business, Company Strategy, Olefins, Polyolefins, Projects, US

By Malini Hariharan

One more US cracker and propane dehydrogenation (PDH) project has been confirmed. After months of speculation Formosa Plastics has announced that plans to build a 800,000 tonnes/year ethane cracker, a 600,000 tonnes/year PDH plant and a 300,000 tonnes/year low density polyethylene (LDPE) plant at Point Comfort, Texas. The $1.7bn investment is due to be completed in 2016.

Ethylene from the cracker will feed the LDPE unit and other existing downstream plants at the site. The company did not identify plans for the propylene from the PDH unit but said the additional propylene will provide ‘operational flexibility’

Formosa joins Chevron Phillips Chemical, Shell Chemicals and Dow Chemicals with plans for new crackers in the US during 2016-17.

South Africa-based Sasol is undergoing a feasibility study, due in the second half of 2013, for a $3.5bn-$4.5bn cracker of 1.0-1.4m tonnes/year at Lake Charles, Louisiana. Sasol already has a 470,000 tonne/year cracker at the site.

Dow Chemicals also plans to restart its 390,000 tonne/year cracker in St. Charles, Louisiana, by the end of 2012.

The shale gas fueled ethane boom has also prompted companies to plan expansions or debottlenecks at existing sites, including Westlake Chemical, LyondellBasell and INEOS. Other companies who have said they are evaluating new crackers include Saudi Arabia’s SABIC, Brazil’s Braskem, as well as US-based start-up Aither Chemicals.

The expansions and new projects add up to an estimated 29% increase in US ethylene capacity by 2017. The extra ethylene will also trigger a wave of capacity addition downstream. Given the capacity additions planned elsewhere in the world, including China, it is perhaps time for some rational thinking in the US.

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