Braskem’s plant ends multi-year drought of no new US PP capacity

Al Greenwood

11-Sep-2020

HOUSTON (ICIS)–Braskem’s new polypropylene (PP) plant ends a drought of more than 10 years in which the US saw no new capacity for the resin.

Braskem’s new plant, called Delta, has a capacity to produce 450,000 tonnes/year of homopolymer, impact copolymer and random copolymer PP. It recently started production in in La Porte, Texas.

The ICIS Supply and Demand database shows that the last time a new PP line started up in the US was in 2005. That line, now owned by LyondellBasell, is in Lake Charles, Louisiana.

A LOT HAS CHANGED
In the immediate aftermath of the 2008-2009 recession, the US actually lost PP capacity.

In 2009, Sunoco said it would shut down and dismantle its 200,000 tonne/year PP plant in Bayport, Texas.

Phillips Sumika announced in 2011 that it would shut down its two PP units in Pasadena, Texas, which had a total capacity of 365,000 tonnes/year.

Braskem entered the US market in 2010, when it acquired three plants through its $350m acquisition of Sunoco’s PP business. It followed this a year later with its $340m purchase of Dow’s PP business.

The outlook for PP in the US started to change with the long economic recovery and with the advent of shale gas and shale oil, which gave the US a large supply of low-cost chemical feedstock.

“We believe in shale,” said Mark Nikolich, CEO of Braskem America. He made his comments during a press conference about the new plant. This gave PP producers such as Braskem a long-term supply of low-cost propylene.

Braskem is starting up its new Delta polypropylene (PP) plant in the US amid what the company considers to be fundamental changes in consumer behaviour caused by the coronavirus.

Nonwoven fabric made of PP is used to make disinfectant wipes as well as face masks, disposable gowns and other personal protective equipment (PPE). During the pandemic, demand for nonwoven fabric increased by 35-45%, Nikolich said in an earlier interview with ICIS.

Demand for PPE will decline from those peaks, but it will settle at a higher level than before the pandemic. Braskem expects a similar change in demand for packaged food, he said. Demand for durable and flexible packaging will also settle at an elevated level.

PP is also used in automobiles. Demand from this end market crashed as a result of the coronavirus. Since then, it has reached or exceeded pre-pandemic levels because suppliers are restocking inventories, Nikolich said. This should level off by the second quarter of 2021.

In all, demand for PP in the US is in the midst of a V-shaped recovery, he said.

UPCOMING PP PLANTS
Other new PP plants could follow Braskem’s in North America.

Inter Pipeline is building a 525,000 tonnes/year PP complex in Alberta province in Canada. It could start operations in early 2022. Inter Pipeline is seeking a partner for the project.

In the fourth quarter of 2022, Formosa Plastics USA could start up a 250,000 tonnes/year PP plant in Point Comfort, Texas.

FG LA LLC, a member of the Formosa Plastics, has plans to build a 600,000 tonne/year PP unit as part of its Sunshine project in St James parish, Louisiana.

Others are having second thoughts.

Canada Kuwait Petrochemical Corp (CKPC) is evaluating the impact of the coronavirus on PP demand as it decides when and how to proceed with its propane dehydrogenation/PP project in Canada’s Alberta province.

BRASKEM’S ‘MIRACLE PROJECT’
Braskem’s PP plant, the first of this wave, uses WR Grace’s all gas-phase UNIPOL process technology. It allows the plant to produce homopolymers, random copolymers and impact copolymers.

The process technology has no moving parts inside of the reactor and it requires less equipment than any alternative, according to WR Grace.

Nikolich said the plant produces about 50% fewer greenhouse gas emissions when compared with the typical PP plant in the US.

He calls the Delta plant a “miracle project”.

Braskem broke ground on the plant just after Hurricane Harvey flooded the Houston area in 2017. “You all saw and some of you experienced the destruction in Houston,” Nikolich said.

Work on the plant continued even as the coronavirus began spreading around the world.

Because of travel restrictions, some critical personnel could not visit the site and commission equipment, Nikolich said. Braskem worked around this by relying on digital platforms and technology.

“They were able to do it and to get really critical pieces of equipment up and running,” Nikolich said.

Still, the coronavirus delayed the project. Braskem expected start-up in the first half of 2020. Instead, operations started in the second half and that was primarily due to the pandemic.

Hurricane Laura then caused some last-minute jitters.

“We still had contractors out there. We had equipment. We had to secure the site,” Nikolich said.

As a precaution, Braskem had shut down its plants in Oyster Creek, Texas, and La Porte, Texas, he said. After 48 hours, Braskem restarted these plants, and it soon started up the Delta project.

“To start it on the heels of Harvey and to conclude this project directly after Laura in the midst of Covid I think is an amazing feat,” Nikolich said. “I’m very proud to say that both from a cost perspective and from a time perspective, both were less than 10% over budget and less than 10% over our schedule. We’re re really proud of that.”

Focus article by Al Greenwood

Additional reporting by Stefan Baumgarten and Zachary Moore

Thumbnail image shows Braskem’s new PP plant. Source: Braskem

Click here to view the ICIS Coronavirus, oil price crash – impact on chemicals topic page.
Click here to view the US Gulf storms – impacts on chemicals topic page.

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