DuPont joins new US cracker expansion wave

(adds details throughout; adds DuPont comments in paragraph 5)

HOUSTON (ICIS)–US-based DuPont became the latest company to announce a project that will take advantage of growing US supplies of natural-gas liquids (NGLs), with its plans to expand a cracker by 200m lb/year (91,000 tonnes/year).

Contractor CB&I announced the project earlier on Wednesday. It won a $40m contract for work on an ethane cracking furnace expansion at DuPont’s ethylene plant in Orange, Texas.

DuPont’s Orange plant currently has an ethylene capacity of 680,000 tonnes/year, according to ICIS plants and projects.

CB&I did not say when it would start the expansion project or when it should complete it. Nor did the contractor explain why DuPont is expanding the plant or how DuPont will use the extra feedstock.

DuPont said the installation of the heater should be completed in Q4 2018, and the expanded cracker should be online in early 2019.

DuPont’s cracker in Orange is the company’s only ethylene plant in the US, according to ICIS. It is small when compared with the new crackers being built, many of which have capacities of 1.5m tonnes/year.

However, DuPont’s announcement comes as the US continues to increase oil production, raising the supply outlook for ethane and other natural gas liquids (NGLs).

The increase has led to a surge of midstream projects that will process the associated gas from these oil wells to extract the NGLs and then ship them to the Gulf Coast.

Many of these midstream projects serve oil production the Permian and Delaware basins in western Texas and southeastern New Mexico.

However, but some companies have also announced plans for Oklahoma. The state is home to the STACK (Sooner Trend Anadarko Canadian Kingfisher and SCOOP (South Central Oklahoma Oil Province) plays.

ONEOK plans to expand the capacity of its Sterling III pipeline, which ships NGLs from western Oklahoma to Mont Belvieu, Texas.

The project will increase Sterling III’s capacity to 250,000 bbl/day from 190,000 bbl/day, ONEOK said. The company should complete the expansion by the end of 2018.

Meanwhile, Canyon Midstream is planning a cryogenic unit to process 200m standard cubic feet/day of natural gas at its Redcliff Midstream gas processing facility in Woodward county, Oklahoma.

Pinnacle Midstream has begun engineering and construction on the Sierra Grande Gas Processing Plant, a 60m cubic feet/day cryogenic gas plant in the Delaware Basin of west Texas.

DCP Midstream is planning an additional large-scale expansion of the Sand Hills NGL pipeline.

Targa Resources plans to build a new NGL pipeline from the Permian Basin to Mont Belvieu.

Enterprise Products plans to build a pipeline to transport NGL from the Permian Basin to Mont Belvieu.

A group of former executives from Energy Transfer Partners (ETP) has launched Aspen Midstream, having secured a $200m commitment from EnCap Flatrock Midstream and the management team of the new company.

EnCap has since made another equity commitment to create Cardinal Midstream III.

EnLink and Natural Gas Partners created a joint venture to build a processing plant in the Delaware basin.

Enterprise announced several projects back in June 2016.

All of these midstream projects are important to the petrochemical industry because they will provide additional feedstock for new projects.

Because the US can now export ethane and propane, some of the country’s feedstock will be used for expansions in Europe.

INEOS plans to build a propane dehydrogenation (PDH) in Europe that will use feedstock shipped from the US.

US ethane will supply the expansion projects that INEOS is building at its crackers in Grangemouth in the UK and Rafnes in Norway.

Before the announcement by INEOS, Dow Chemical said it would increase the capacity of its new cracker in Freeport, Texas, to 2m tonnes/year.

ExxonMobil and SABIC picked a site in Corpus Christi, Texas, where it may build a cracker and other downstream units.

NOVA Chemicals is creating a joint venture with Borealis and Total to build a 1m tonne/year cracker in Port Arthur, Texas.

Additional reporting by Stefan Baumgarten and David Haydon