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Petrochemicals

Gulf Coast petrochemical plants open, and new ones are planned

Sasol and Lotte open facilities as Chevron Phillips and Shell consider new ones

by Michael McCoy
February 14, 2019 | APPEARED IN VOLUME 97, ISSUE 7

 

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Credit: Sasol
Polyethylene storage towers at Sasol's new Louisiana facility

As more Gulf Coast petrochemical facilities are completed or near completion, a new group of shale-driven projects is starting to crop up.

Sasol says it has opened a polyethylene plant, the first of seven facilities, at a giant petrochemical complex it is building in Lake Charles, Louisiana. The other six will be completed later this year and early in 2020, the firm says.

Reaching this milestone wasn’t easy. When the South African firm green-lighted the project in 2014, it anticipated a cost of less than $9 billion and an opening date in 2018. Now the company expects the overall cost to be as high as $11.8 billion. Sasol blames delays on bad weather, changes to the scope of the project, and absenteeism at the work site.

Also in Lake Charles, South Korea’s Lotte Chemical says it just opened an ethylene glycol plant—on time. “Not too many people can say that,” says Jim Rock, director of the site for Lotte.

The glycol plant is part of a $3.1 billion complex that also includes an ethylene cracker with partner Westlake Chemical. Rock says he expects the cracker will open later this quarter.

These facilities join other new petrochemical complexes built to take advantage of low-cost raw materials extracted from shale. Chevron Phillips Chemical and ExxonMobil Chemical, for example, both opened facilities in Texas last year.

And chemical companies are already starting to talk about a new wave of projects. Chevron Phillips says Orange, Texas, is a finalist site for a second new ethylene cracker it may build. ExxonMobil and Sabic are mulling a joint cracker project. And Shell Chemical says it is exploring options for a large ethylene glycol plant.

Enough ethane will be extracted from US shale over the next decade to serve six or seven more petrochemical plants, says Steve Lewandowski, vice president for olefins at the consulting firm IHS Markit. But he cautions that they may not all be built in the US, as Chinese firms will also be competing for that ethane.

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