OUTLOOK ’19: US to finish first wave of new plants

HOUSTON (ICIS)–Some of the last plants of the first wave of new US projects should start up in 2019, closing out a spurt that started in 2017.

The following table shows the integrated derivative projects that are expected to start up in 2019.

Company	Ethylene capacity (kt/year)	Downstream (kt/year)	Location	Start-Up
Formosa Plastics	1,200	HDPE (400), LDPE (400), EG (800)	Point Comfort, Texas	H1 2019
Sasol	1,500	LLDPE (470), LDPE (420), EO/EG (300), ethoxylates, detergent alcohols (300)	Lake Charles, Louisiana	Q1 2019, LLDPE Dec 2018, LDPE 2019, alcohols H2 2019
Shintech	500	VCM (300), PVC (300), caustic soda (200)	Plaquemine, Louisiana	Q1 2019
Westlake/Lotte	1,000	MEG (760) by Lotte, feed into existing PVC for Westlake	St Charles, Louisiana	H1 2019

The following table shows other projects that should start up in 2019.

Company	Capacity (kt/year)	Product	Location	Startup
Dow Chemical	91	Ethylene Expansion	Orange, Texas	Early 2019
Dow Chemical	500	Ethylene Expansion	Freeport, Texas	End 2019
LyondellBasell	500	HDPE	La Porte, Texas	Mid-2019
ExxonMobil Chemical	650	PE	Beaumont, Texas	2019
MEGlobal	750	MEG	Freeport	2019
DowDuPont	350	LDPE	Plaquemine, Louisiana	Q1 2019
DowDuPont	200	EPDM	Plaquemine, Louisiana	Q1 2019

In addition to starting up new plants, companies could announce final investment decisions (FIDs) on pending projects.

A joint venture made up of Pembina Pipeline and Kuwait’s Petrochemical Industries (PIC) could make an FID on a propane dehydrogenation (PDH) unit in Canada. The project would include a polypropylene (PP) plant.

LyondellBasell has indicated that it may make an FID on a PDH/PP project in early 2019.

Back in January 2018, PTT Global Chemical (PTTGC) said it and Daelim Industrial Co would conduct a feasibility study on the Thai firm’s planned cracker in Ohio. The project would include polyethylene (PE) and monoethylene glycol (MEG) plants.

The company has yet to announce an FID, and that could happen in 2019.

Enterprise Products has been working on the engineering and license arrangements of a second PDH unit. The company has not said when it could reach a decision on the project, but it may reveal more details in 2019.

Further out, midstream companies plan to start up several new fractionators, which should help meet the increased demand for ethane from new crackers. Many of these new fractionators should start up in 2020.

The US needs this additional ethane.

During the expansion in the US, ethane supplies had failed to keep up with the start-up of new crackers. As a result, prices for ethane rose, squeezing ethylene margins.

At the same time, the start-up of some of the new PE plants was delayed, which lowered demand for ethylene, further squeezing margins.

The startup of additional derivative units in 2019 should help absorb this additional ethylene.

Companies are by no means done building new plants in the US, and subsequent waves should continue in the next decade.

The size of these next waves will depend on the outlook for economic growth and on the spread between ethane and naphtha prices.

Higher oil prices should widen that spread, and that should encourage more projects in the US.

Higher oil prices will also encourage US exploration and production (E&P) companies to drill more wells, which should increase production of both crude and natural-gas liquids via associated gas.

Lower oil prices would lessen the spread and discourage new projects.

In addition to costs, demand for petrochemicals also has to warrant new capacity.

Petrochemical demand typically changes at multiples of GDP, and several signs indicate that GDP growth could slow.

Focus article by Al Greenwood