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2017 to bring peak in first wave of US ethane cracker construction



Petroleumworld.com 01 20 2017

Two thousand and seventeen will not only mark the peak of the first wave of U.S. ethane cracker construction, but will also be the year in which decisions are made on the anticipated second wave of construction.

Of eight projects that form the first wave, up to six will come online during 2017, adding more than 7 million tons per annum of ethylene capacity. Of another 10 projects being considered, at least two are due to reach final investment decisions early in the year, and a third – and the biggest of them all – is progressing quickly toward a decision.

Ohio, Texas due for big decisions

PTT Global Chemical is expected to make a final investment decision on Ohio's first ethane cracker by the end of March, Belmont County Commissioner Mark Thomas told local newspaper the Wheeling Intelligencer recently. According to the report in the Intelligencer, site preparation for the planned cracker in Belmont County, Ohio (located on the other side of the Ohio River from Wheeling, West Virginia) is nearly complete, and all signs of the former R.E. Burger power plant are “nothing more than a memory”.

Thailand's PTT and minority stakeholder Marubeni of Japan have spent more than a year evaluating the viability of the project. The project cleared a significant hurdle in the first week of January when the Ohio Environmental Protection Agency agreed to let the company discharge wastewater into the Ohio River. The Ohio EPA is still reviewing the air permit for the project, according to an agency spokesperson.

This would be the second ethane cracker in the U.S. Northeast, with Shell planning to begin construction on a cracker in Beaver County, Pennsylvania, in the final quarter of 2017, and to begin producing ethylene there by 2022. Braskem has also been considering a 1.1 mtpa cracker in Parkersburg, West Virginia, although multiple sources have told Petrochemical Update these plans are on hold.

On the Gulf Coast, Total intends to sanction its 1 mtpa Port Arthur, Texas cracker project in the coming months, Chairman and CEO Patrick Pouyanné revealed to investors late last year. FEED studies were completed in summer, and Total is now discussing “a very competitive cost”, he said. The Port Arthur site includes a 169,000 b/d-capacity refinery and an existing 1 mtpa steam cracker, the latter of which is a joint venture with BASF. In 2013, Total and BASF adapted the steam cracker to meet 80% of its feedstock needs with ethane, butane and propane from shale gas – as opposed to more-costly naphtha.

ExxonMobil and SABIC are in the final stages of buying land in Texas for the ethane cracker they are proposing to build in a joint venture, the San Antonio Express News reported on December 23, and SABIC later confirmed. The land is 1,400 acres of mostly open fields between the small cities of Portland and Gregory, and across Nueces Bay from Corpus Christi. According to the Express News, Portland's City Council unanimously voted to urge the joint-venture partners to choose another location. However, they have no power to block the land being used for an ethane cracker as it falls outside the city limits.

Several crackers close to finish line

Joint-venture partners OxyChem and Mexichem are likely to be the first to the finish line in 2017, with their Ingleside ethylene plant on track for commissioning in January and to begin producing ethylene in the first quarter of 2017, according to OxyChem CFO Christopher Stavros. OxyChem will use the ethylene to manufacture vinyl chloride monomer, which will then be sent to Mexichem's plants in Mexico and Colombia to produce polyvinyl chloride and PVC piping systems.

Two separate 1.5 mtpa crackers being constructed in Texas by Chevron Phillips (CPChem) and Dow Chemical are 85% complete, senior officials revealed recently, and both are on target to come online in mid-2017. Greg Garland, Chairman and CEO of Phillips 66, which owns a 50% share in CPChem's project in Cedar Bayou, said the polyethylene business is on track to start by mid-2017, and the ethane cracker in the second half of the year.

ExxonMobil's 1.5 mtpa cracker in Baytown, Texas is also expected to come online in 2017, with Formosa Plastic's 1.59 mtpa cracker in Point Comfort, Texas to follow in 2017 or 2018 and Sasol's cracker in Lake Charles, Louisiana in two phases in 2018 and 2019. Indorama also expects to this year complete the refurbishment of the 420,000 tpa Louisiana cracker it acquired in in 2014.


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