First wave of US major projects reaches final stages of production
Several U.S. major petrochemical projects to emerge from the natural gas boom are reaching their final stages of production just as a second wave of building begins, and engineering and construction teams are looking at innovative techniques to increase productivity, industry experts told Petrochemical Update.
Since 2010, $85 billion worth of petrochemical projects have been completed or started construction, according to the American Chemistry Council (ACC).
The ACC estimates there are 310 projects currently under construction or planned and $185 billion in potential capital investment as of mid- 2017, up from the 97 projects and $72 billion in Mach 2013.
Image: American Chemistry Council
The newly merged DowDuPont has started up its new ethylene and plastics plants in Freeport, Texas, making it the first to debut a major ethylene project along the Texas Gulf Coast.
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 Chemical and Exxon Mobil are both completing massive ethane processing plants in Texas.
ExxonMobil announced the mechanical completion in May of two new 650,000 tonne/year polyethylene lines at its plastics plant in Mont Belvieu, Texas. The company expects production to begin by the end of this year.
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.
North America Ethylene Expansion Calendar
Image: Vertical Research Partners
Innovations for the next wave
As a new wave of construction is expected to begin in 2018, industry experts said it is important to look at key lessons learned from the first wave and apply these in the next chapter.
Contractor and owner communicating on the front end, managers listening to craft labor, innovations in recruiting and training and productivity were all hurdles the first wave had to creatively overcome, experts said.
“When we talk about mega projects, these can be classified in the wild as a beast…hard to train, known for size and complexity. Some become landmark. Some become catastrophes,” said Stevie Toups, Senior Vice President of Turner Industries. “When looking at the first phase of the mega projects, we have seen a few come online that have been unparalleled views of excellence in this industry.”
On one site, productivity is exceptionally high and Toups believes it all comes down to a project manager who has taken time to listen.
“We have a young project manager in charge of the entire thing and I honestly believe he is absolutely scared to death. He knows it is a career altering move. He asked everyone what will it take to make this project the best ever and he listened,” Toups said.
Contractors complained about a muddy path on the way to work. The next day, there was a limestone path and cones. Laborers complained about not enough microwaves at lunch and the next day there were tents everywhere and rows of microwaves, he added.
A culture of listening and project integration with all teams involved in the projects from craft to engineering to maintenance to capital led to many successes in the first wave, Toups said.
“We had a young pipefitter wiggling a difficult pipe trying to figure out a way to get it in the pipe rack. He offered up a solution that had never been done before. The owners not only listened and encouraged him, but created a white paper and led training meetings on this new “Bob” method,” Toups said. “This guy ‘Bob,’ he will always be with that company.”
Project success will be tied to putting the best personnel on the job, Toups said. But with an ongoing labor shortage, recruiting and training efforts must continue.
Looking back at 2006 and 2007, the industry looked at Hispanic labor, recruiting craft workers from Puerto Rico and Argentina, but left out an entire world on Facebook, Toups said.
Turner Industries created a job hiring app and six months into having the app, the company had 15,000 hits a month. Of the 15,000 hits, four out of five had never worked for Turner before and of those, eight out of ten had an industry certification.
“That is an entire population, a country, that never worked for us. We are a small contractor in Louisiana and we found 15,000 people. There are rocks out there that the industry is not turning over and needs to.”
The Louisiana legislature in June, for the first time in nine years and after a tremendous fight, approved a higher education budget that will be the same as last year, Toups added.
“That is sending a signal out to the rest of the world,” Toups said. “There are more PhDs enrolled in the community college system of Louisiana than there are PhD candidates in higher education Louisiana schools. People are starving for work.”
By Heather Doyle