Start-up imminent at OxyChem Texas cracker; US ethane consumption to rise sharply in 2017
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Start-up imminent at OxyChem Texas cracker
Joint-venture partners Occidental Petroleum (OxyChem) and Mexichem are on track to finish commissioning their Ingleside, Texas ethane cracker by mid-January and to produce ethylene in the first quarter, OxyChem President and CEO Vicki Hollub revealed in an earnings call.
Assuming oil prices of about $50 per barrel, OxyChem expects to generate $150 million of cashflow from its share of the jointly owned cracker next year. It says it will carry a small amount of capital spending for commissioning the startup into 2017.
Mexichem CEO Antonio Carrillo said in his own company’s third-quarter earnings call that the plant will ramp up throughput during 2017 and reach the full 544,000 million-ton-per-annum capacity late in the calendar year.
Meanwhile, Chevron Phillips Chemical has pushed back expected startup of its Baytown, Texas cracker to the second half of 2017. The cost of the cracker will be 5% to 10% more – equating to about $250 million to $500 million – than expected due to construction delays, Chairman and CEO Greg Garland told analysts.
President Timothy Taylor said the issues were around construction and productivity. The key to improving productivity is for joint owners Phillips 66 and Chevron to reorganize the way they work with the contractors, he said.
Fluor, one of the two EPC contractors for the Baytown plant, recorded a $154 million impairment for the project in the third quarter, which chairman and CEO David Seaton called very disappointing.
US ethane consumption to rise sharply in 2017
U.S. ethane consumption will average 1.12 million barrels per day for the full 2016 calendar year, a 5% increase from last year, and will rise 16% in 2017, according to the latest estimates from the Energy Information Administration.
Consumption of natural gas liquids rose to 2.26 mbd in the third quarter from 2.21 mbd the previous quarter. Aside from ethane, propane accounted for 0.94 mbd and butane for 0.20 mbd.
Meanwhile, Steve Lewandowski, Senior Director, Global Olefins, at IHS Chemical, told an IHS conference in Singapore that global ethylene supply will fall short in 2019-2022 as demand outpaces new capacity additions. While ethylene capacity will rise by 28 mtpa from both conventional and non-conventional sources between 2016 and 2021, capacity is not equivalent to supply, Lewandowski said, and therefore it would be risky to infer margins from those trends.
Braskem to use Grace process technology at La Porte, Texas facility
W.R. Grace & Co has announced it will provide its registered UNIPOL PP process technology and services to Braskem America’s planned facility in La Porte, Texas, which is on track to begin operations in early 2019.
Braskem is the largest producer of thermoplastic resins in the Americas and the largest producer of PP in the United States, and has five existing U.S. production plants in Texas, Pennsylvania, and West Virginia.
UNIPOL PP process technology is an all gas-phase technology, and W.R. Grace explains that it is designed with fewer moving parts and less equipment than any competing technology. It lists other advantages to the process design as lower capital costs, lower operating costs, and lower maintenance costs. Although mechanically simple, W.R. Grace says the underlying technology enables the production of broad, advanced homopolymers, random copolymers, and impact copolymers.
Braskem’s La Porte facility is designed to produce 450,000 mtpa of homopolymer, random copolymers, and impact copolymers in a single reactor line. This is the fifth UNIPOL PP reactor line for Braskem, joining existing facilities at Marcus Hook, Pennsylvania (two reactor lines), Seadrift, Texas, and Wesseling, Germany.