Issue Date: April 4, 2011
Petrochemicals’ U.S. Growth Spurt
Thanks to low-cost natural gas from shale, companies are moving forward with investments in U.S. petrochemical production again after a decade-long hiatus during which they shunned building new capacity. Chevron Phillips Chemical announced last week that it is launching a feasibility study on a new ethylene cracker, and Ineos disclosed it is mulling a new ethylene oxide plant.
Chevron Phillips says it is studying construction of a 2.5 billion-lb-per-year cracker as well as new derivatives plants at one of its existing sites on the Gulf Coast. The company estimates that the plants would be completed by 2016 or 2017.
Chevron Phillips already operates 7.8 billion lb of ethylene capacity in Cedar Bayou, Port Arthur, and Sweeny, Texas. In October, the firm announced it will build a plant for the ethylene derivative 1-hexene in Cedar Bayou. It also runs an aromatics plant in Pascagoula, Miss., and a styrene joint venture with Styron in St. James, La.
The company is already advancing discussions with engineering contractors, according to Chief Operating Officer Tim Taylor. “We intend to expedite our development decisions to capitalize on the advanced feedstock position that shale gas resources could bring to the chemical industry in the U.S.,” he says.
The U.S. could support two new crackers, plus expansion projects at existing facilities, according to Chemical Market Associates Inc., which held its annual petrochemical conference in Houston last month. “You’ve got to put North America back into consideration,” noted Mark Eramo, executive vice president of market advisory services at CMAI.
Ineos, meanwhile, is considering the U.S., as well as other locations, for the construction of a 1.1 billion-lb ethylene oxide plant with “appropriately sized” units for derivatives, including ethylene glycol.
“The U.S. is an obvious location for Ineos Oxide to consider its next expansion,” says Hans Casier, CEO of Ineos Oxide. He notes Ineos’ U.S. presence in ethylene oxide derivatives and the country’s growing competitive advantage in petrochemicals.
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