INEOS to build SM plant in US Gulf Coast; More ethylene projects scheduled; China issues tariffs on chemicals

Our pick of the latest petrochemical news you need to know

Ineos Styrolution plans to build a world-scale styrene monomer plant on the U.S. Gulf Coast.

INEOS to build SM plant in U.S. Gulf Coast

INEOS Styrolution will commission an engineering study to build a world-scale styrene monomer (SM) plant in the U.S. Gulf Coast, the company announced in a press release.

The new SM plant will use best-in-class technology and benefit from access to low-cost feedstock and energy from shale gas as well as an excellent infrastructure. A specific location is yet to be defined, the announcement said.

Styrene monomer is a feedstock used in production of polystyrene, acrylonitrile butadiene styrene (ABS), styrenic copolymers and other specialty resins.

More ethylene projects scheduled

The visibility into another wave of petrochemical construction spending is becoming clearer.

Even as several new ethylene and derivative units have begun operations in 2017 and the first half of 2018, construction of several new projects is planned to begin this year.

Additional projects are expected to break ground in 2019 and 2020, with most of this new capacity coming online around 2023.

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China issues tariffs on chemicals

China will increase tariffs on 106 products originated from the U.S. by 25%, including several chemicals, according to a statement from China’s Ministry of Finance on April 4th.

The U.S. products targeted by the tariffs were worth nearly $50 billion in 2017, and include items such as soybeans, cars and chemicals.

At least 44 of the 106 items are chemicals and include items such as propane, ethane, polyethylene, base oils, polyethylene terephthalate, ethylene, polyvinyl chloride, adhesives, rubber, acrylonitrile and more.

Shell partners on pilot gas-to-chemical plant

Shell, two universities and the National Energy Technology Laboratory will build a pilot facility that will convert natural gas into hydrogen, olefins and other chemicals.

Shell is working with researchers from West Virginia University, the University of Pittsburgh and the U.S. Department of Energy’s National Energy Technology Laboratory to develop a technology platform to turn stranded natural gas directly into aromatics, C2-C4 olefins and hydrogen.

The current indirect synthesis route requires three steps and presents challenges in terms of economics and energy usage, according to West Virginia University chemical engineering professor John Hu, who is leading the four-year research effort.

Indirect synthesis comprises converting natural gas to syngas, syngas to methanol, and then methanol to chemicals.

The group’s aim is to build a pilot-scale plant that eliminates the syngas step and directly converts natural gas to chemicals – a more cost-effective way to monetize associated natural gas that would otherwise be flared.

“Both capital and operating costs are reduced due to the elimination of the syngas-production step,” Hu said. 

US Coal demand to remain flat for several decades-EIA

The U.S. Energy Information Administration (EIA) has projected that domestic demand and coal exports will remain relatively flat through 2050 in its latest Annual Energy Outlook 2018, even as many coal-fired power plants are retired.

Coal disposition for the next three decades will likely average 750 million tons/year, down from the peak of nearly 1.2 billion tons in 2008. 

Coal demand in the power sector is sensitive to changes in the price of natural gas. Overall, coal disposition is mostly affected by changes in the electric power sector, where 82% of domestic coal was consumed in 2017. 

U.S. power sector consumption of coal depends on the amount of coal-fired generating capacity and the utilization rate of that coal generation fleet. Coal’s competition with other electricity-generating fuels, especially natural gas, has implications for both capacity retirement and utilization decisions.

At the end of 2017, coal-fired generation capacity in the U.S. totaled 260 GW, down from a peak of 310 GW in 2011. At least 25 GW of coal-fired capacity will retire within the next three years (2018–2020), according to planned retirements reported to EIA. 

Electricity generation from coal is now second to natural gas, which surpassed coal as the leading source of U.S. electricity generation in 2016.