US CP Chem breaks ground on 1m tonne/year PE project

HOUSTON (ICIS)–Chevron Phillips Chemical held on Tuesday a ground-breaking ceremony for its two new polyethylene (PE) units at its Sweeny complex in Old Ocean, Texas, making the company one of the first to move forward with a major ethylene derivative project that takes advantage of growing supplies of US ethane.

“We put a premium on working fast,” company CEO Peter Cella said. “I think that where we are today, we still feel we are ahead of the rest of the competition.”

Each of the PE units will have a 500,000 tonne/year capacity, with one producing bimodal high density PE (HDPE) and the other producing metallocene linear low density PE (LLDPE). While Chevron Phillips already has plants that use these two PE technologies, the two plants in Old Ocean will be the first world-scale plants that use the technology.

The company aims to sell 100% of the HDPE bimodal resin in the US, Cella said. Around 75-80% of the metallocene LLDPE will be aimed at the US domestic market, with approximately 20-25% aimed at the export market, he added.

The project is the second step in a major expansion for the company, which in April held a ground-breaking ceremony for its new 1.5m tonne/year cracker at its Cedar Bayou complex in Baytown, Texas. Together, the value of the two projects is about $6bn.

The company opted to locate the two projects at two different locations in an effort to get a closer balance of ethylene supply and ethylene demand at both sites, Cella said. The Cedar Bayou site is now net short of ethylene, while the Sweeny site is long on ethylene, because there are currently no derivative units located there, he said.

The two new PE units in Old Ocean will be fed by ethylene from the Sweeny site, while the new ethylene capacity at the Cedar Bayou site will feed existing PE units, Cella said.

“By putting the ethylene unit at Cedar Bayou we will convert that site from being short to being slightly long on ethylene,” he said.

While Cella said he is confident about the economics of the project, he acknowledged that it does not come without some risk.

“Simply put, the biggest risk for the economic success of this is the global economy,” he said. “We need economic growth to drive the demand for PE resin.”

Chevron Phillips expects both plants to be completed in 2017.

The following lists announced PE projects in the US.