ExxonMobil cranks up new PE line in Texas, plans first exports in October

ExxonMobil started production at one of two new 650,000 tonne/year polyethylene (PE) lines at its plastics plant in Mont Belvieu, Texas and plans to export its first polyethylene shipment from the plant at the Port of Houston in October, less than two months after Hurricane Harvey pummeled through the area, the company said.

ExxonMobil is planning to invest more than $20 billion over 10 years to build and expand manufacturing facilities across the U.S. Gulf as part of its Growing the Gulf initiative. Image: ExxonMobil

Hurricane Harvey was a Category 4 hurricane with a top wind speed of 132 miles per hour (mph), recorded in Port Aransas, Texas. It dumped 51.88 inches of rain over a seven -day period near Mont Belvieu, about 35 miles east of Houston. An estimated 1 trillion gallons of water fell during the four days that Harvey stalled over Harris County. The highest storm surge — about 12.5 feet — was recorded at the Aransas Wildlife Refuge, located northeast of Corpus Christi.

The ExxonMobil expansion is expected to raise the capacity of the Mont Belvieu PE plant by 1.3 million tonnes/year. The project also includes a new 1.5 million tonne/year ethane cracker in Baytown, Texas, which would supply ethylene feedstock to the Mont Belvieu plant.

Once the expansion is completed, the Mont Belvieu plastics plant will have a total capacity of 2.5 million tonnes/year, making it one of the world’s largest PE plants.

Growing export market

Demand for ethylene is poised to grow by 5.5 million to 6 million tonnes a year, assuming 2.5 to 3% GDP growth, according to IHS Markit.

Rapidly growing U.S. ethylene production and investment in PE capacity will increase North American PE production to more than 54 billion pounds by 2020, up from about 44 billion pounds in 2015 as supply grows faster than domestic demand, according to Petrochemical Update’s US Polyethylene Export report released in May 2017

An additional 2 billion pounds of PE capacity could be added over this time frame pending final investment decisions.

PE production will exceed domestic demand, adding up to 6-9 billion pounds of excess inventory for export through 2020, assuming 75% of the announced projects start up on time.

The added supply will create opportunities over the next decade for North American companies to export their excess supply to regions like China, Africa and India.

ExxonMobil’s two new 650,000 tonne/year PE units will be 100% dedicated to exports as there is no railcar access to the plants, according to an earnings conference presentation.

ExxonMobil plans to export much of the production from the new plant through the Port of Houston, with the first export cargoes planned for late October. At peak, the site will ship more than 200 containers per day.

"The expansion of our Mont Belvieu facility further enhances our ability to meet growing global demand for high-performance polyethylene products around the world," Neil Chapman, president of Exxon Mobil Chemical, said in a statement.

Additional Plans

ExxonMobil is planning to invest more than $20 billion over 10 years to build and expand manufacturing facilities across the U.S. Gulf as part of its Growing the Gulf initiative. The expansion covers 11 major chemical, refining, lubricants and liquefied natural gas (LNG) projects and will create more than 12,000 full-time jobs.

Since 2010, 301 chemical industry projects worth $181 billion have been announced in the United States, according to the American Chemistry Council (ACC).

ExxonMobil is one in a string of many major U.S. petrochemical projects reaching final stages of production during the fourth quarter of 2017.


Image: Vertical Research Partners

The newly merged DowDuPont has started up its new ethylene and plastics plants in Freeport, Texas. The new plant will produce some 1.5 million tonnes/year ethylene, and plans are in place to increase that capacity to 2 million tonnes/year, making it the world's largest ethylene production plant.

A joint venture with Houston's Occidental Petroleum and the Mexican chemical maker Mexichem opened a smaller ethane processing plant earlier in 2017 near Corpus Christi, Texas to feed the company’s existing plant.

Chevron Phillips has completed its two 500,000 tonne/year polyethylene units at Old Ocean, Texas and is initiating the start-up process of these units, but the $6 billion project's second phase will be delayed due to flooding at the site caused by Hurricane Harvey, the company said.

Initially planned for startup by year-end, Chevron Phillips said it now expects the 1.5 million tonne/year Baytown ethane cracker to be finished by the end of March 2018 and achieve full production by mid-2018.

By Heather Doyle