Another U.S. Cracker Planned

Even after a dozen firms have announced multi-billion-dollar U.S. ethylene cracker projects, the rush to build petrochemical plants to take advantage of cheap and plentiful shale gas shows no sign of abating.

Formosa Petrochemical, a subsidiary of Taiwan’s Formosa Plastics, has launched a feasibility study for a $9.4 billion complex in St. James, La. The project was unveiled through the office of Louisiana Gov. Bobby Jindal, a Republican presidential candidate, who visited Taiwan last year in a bid to win the project for his state.

Formosa envisions a two-stage project. The first phase would feature an ethane-based ethylene cracker as well polyethylene, ethylene glycol, and other plants. The second phase would double capacity.

Assuming a final go-ahead, Formosa plans to begin construction next year. Another Formosa subsidiary is already building a new cracker in Point Comfort, Texas, that is slated to open in 2017.

Separately, PTT Global Chemical is progressing on its proposed cracker in Mead Township, Ohio. The Thai firm says it plans to spend $100 million on front-end engineering and design. PTT has picked Fluor and Bechtel as contractors and plans to make a final investment decision in 12 months.

Ohio Gov. John R. Kasich, who is also running for president, says the project marks a major step for Ohio as a participant in the shale gas revolution. The cracker would be on the site of a coal-fired power plant that was shuttered in 2011.

Chuck Carr, senior director of global olefins at the consulting firm IHS Chemical, says local government support is an important consideration in selecting a site for a new plant. “If you are getting tax incentives, that can be helpful,” he says. “And it goes a long way toward getting community support.”

Overall, Carr expects 11 million metric tons per year of new ethylene capacity to be added in North America through 2019, a 30% increase over current levels. He sees plenty of shale gas feedstock to supply the new plants—and even enough for another wave of projects that could hit the market by 2025.