Braskem to import US ethane; INEOS considers Texas growth

Petrochemicals news you need to know.

Braskem to import US ethane

Braskem has signed a 10-year contract with Enterprise Products Partners for the supply of ethane imported from the US, starting in mid-2017, Braskem said in a statement on March 21.

The company will invest around R$380 million ($104.84 million) to adopt the use of shale-gas ethane feedstock in its operations and to diversify the supplying of its petrochemical complex in the state of Bahia – which is currently 100% naphtha-based – allowing it to use up to 15% of ethane. 

The US ethane will be shipped from the Port of Houston in Morgan's Point, Texas, where it will be liquefied and loaded onto special vessels refrigerated to -90°C, to the Liquefied Gas Terminal in the Port of Aratu in Bahia. 

From the port terminal, the product will be transported via pipeline to Braskem's Basic Petrochemicals Unit in Camaçari, where it will be gasified once again for use as feedstock.

Braskem will reportedly import the ethane at a price based on the international Mont Belvieu reference price.

Oil prices to average $34/barrel in 2016

Brent crude oil prices are projected to average $34 per barrel (b) in 2016 and $40/b in 2017, according to the US Energy Information Administration’s (EIA) Short-Term Energy Outlook published on March 16. This is $3/b and $10/b lower, respectively, than forecast in the EIA’s Short-Term Energy Outlook in February.

The lower forecast prices reflect oil production that has been more resilient than expected in a low-price environment and lower expectations for oil demand growth.

Meanwhile, the EIA expects West Texas Intermediate crude oil prices to average the same as Brent in 2016 and 2017, though the current values of futures and options contracts suggest high uncertainty in the price outlook. 

The EIA also projects Henry Hub spot prices to average $2.25/million British thermal units (MMBtu) in 2016 and $3.02/MMBtu in 2017, compared to an average of $2.63/MMBtu in 2015.

NOVA studies Corunna expansion; INEOS considers Texas growth

NOVA Chemicals is planning a $400 million upgrade at its Corunna, Ontario plant to create a pipeline connection to a second source of natural gas liquids from the eastern US and to convert the Corunna cracker to use up to 100% ethane feedstock, Sarnia Observer reported on March 15.

Work is scheduled for 2017 and 2018, with the new pipeline expected to come online in 2018. Most of the work is scheduled for a large turnaround at the plant site in 2017.

NOVA’s 2016 capital spending plan includes work to expand the rail yard at the company’s Moore site to handle additional 200 rail cars, as well as installing a new thermal oxidizer at the site to reduce emissions of ethylene and other volatile organic compounds.

The company is also progressing with the engineering work on a potential new polyethylene plant in Sarnia-Lambton, Ontario that could be tied to a proposed expansion at the Corunna site designed to boost its ethylene output by 50%. NOVA expects to reach a decision on the new plant and the Corunna site expansion in 2017, according to Sarnia Observer.

Meanwhile, INEOS is considering adding between 250 million and 1 billion pounds (between 113 KTA and 453.5 KTA) of annual ethylene production, as well as adding polypropylene and alpha-olefins capacity, at its Chocolate Bayou, Texas site, Bloomberg reported on March 16, citing Dennis Seith, CEO of the company’s US olefins and polymers unit.

Decisions on all three investments will be made within a year, with the expanded ethylene output available early next decade.

The company, which earlier in March began exporting US ethane to Europe, is also weighing acquiring its own shale gas fields in the US.

INEOS is also moving ahead with its 470 KTA high-density polyethylene manufacturing joint venture plant with Sasol in La Porte, which is scheduled to start production in Q4 2016.

Turnaround updates for CPChem, Shell, Dow

Also in Texas, Chevron Phillips Chemical has shut its 667 KTA Ethylene Unit No. 24 at its Sweeny olefins complex in Old Ocean, ahead of a 40-50-day planned turnaround at the site, Platts reported on March 16.

Shell is also planning a four-week turnaround at its 375 KTA monoethylene glycol (MEG) unit in Geismar, Louisiana in March or April, Platts reported on March 14. The maintenance has been pushed back from February and might be delayed further, the report added.

Dow Chemical is also planning a turnaround in March at its 400 KTA mtpa unit in Seadrift, Texas, according to Platts.

Moreover, Indorama Ventures has declared force majeure on MEG and ethylene oxide (EO) deliveries from its Clear Lake, Texas, facility, according to a filing by the company. The required work on the plant, which has a capacity of 550 KTA of EO and MEG, might not be completed until late March or in April.