US starts ethane exports to Europe; Iran to double PE capacity by 2020

Petrochemicals news you need to know.

Sasol delays Louisiana complex

Sasol announced on March 7 that based on a “lower-for-much longer” oil price scenario, it plans to rephase several units at its $8.9 billion, 1.5 mtpa ethane cracker and derivatives complex in Lake Charles, Louisiana.

A detailed review of the project is under way and is likely to be completed by mid-2016. The company said that “the [beneficial operation] of some smaller derivative units will move into 2019 and the overall end-of-job project cost estimate will remain under pressure.” Overall capital spent on the project so far has been about $3.7 billion.

Meanwhile, the project has completed its first major heavy haul transport after transporting the first of three boilers to the project site and placing it on its permanent foundation, Fluor, the primary EPCM contractor (in a joint venture with Technip) reported on January 29.

G2X awards methanol plant contracts; Valero shelves Louisiana project

In the methanol sector, G2X Energy announced on March 9 that it had awarded an engineering services contract to Toyo Engineering for its greenfield $1.5 billion, 1.4 mtpa gas-to-methanol plant in Lake Charles, Louisiana, scheduled for completion in 2019.

Toyo will provide basic and detailed engineering as an engineering subcontractor to the Proman Group, the primary engineering, procurement and construction contractor for this project.

Toyo will be providing basic engineering for off-site and utility facilities and the detailed engineering of the complete methanol facility.

Previously, on March 8 G2X announced it had entered into license and engineering contracts with Johnson Matthey for the Lake Charles project. Johnson Matthey will supply the technology license, basic engineering, catalyst, and technical services for the project.

Meanwhile, Valero said on March 7 that its proposed $700 million, 1.6-mtpa methanol plant at St. Charles Parish, Louisiana had been shelved indefinitely due to low energy and methanol prices, and the company’s inability to find an investment partner.

2015 construction craft wage rates

Average annual salaries – not including overtime, per diem and other incentives – for craft workers in the US construction sector ranged between about $49,189 and $88,675 in 2015, according to the 2015 craft professional survey by the National Center for Construction Education and Research (NCCER) published on March 10.

Project supervisors and project managers topped the list, earning $88,675 and $77,917, respectively.

Other professions earning more than $65,000 a year include power generation technicians, combo welders, tower crane operators, power line workers and instrumentation technicians. Mobile crane operators, millwrights, pipe welders, electronic systems technicians and heavy equipment operators earned more than $60,000 in base salary in 2015, the survey said.

Survey data was provided by 89 voluntary organizations from the industrial and commercial construction industries across the US.

The 2015 average annual salary for welders ranged from $56,379 for Welder: Structural/Fabricator, to $62,509 for Welder: Pipe and $70,535 for Welder: Combo. Chart: Petrochemical Update. Data: NCCER.

Sunoco kicks off US ethane exports from Marcus Hook

Sunoco Logistics Partners launched on March 9 the first export shipment of ethane from its Marcus Hook terminal in Pennsylvania to a petrochemical plant in Norway, the company said.

The INEOS Intrepid, one of eight 575-foot tankers commissioned by European chemical manufacturer Ineos, left the Marcus Hook terminal near Philadelphia bound for Rafnes in Norway carrying 27,500 cubic meters of US shale gas ethane.

This is the first time that US shale gas has ever been shipped to Europe. The ethane had been delivered to Marcus Hook from Western Pennsylvania through the Mariner East pipeline.

Iran to double PE capacity

Iran's polyethylene (PE) capacity will double from 4 million tons per annum (mtpa) in 2015 to 8 mtpa in 2020 on the back of new investments following the lifting of sanctions, according to Jayant Mukherjee, an analyst with petrochemicals-focused Beroe Consulting, Platts reported on March 4.

The country’s PE capacity will grow at an annual rate of 13%, he said.

Meanwhile, Iranian ethylene capacity is projected to rise from 6 mtpa in 2015 to 11 mtpa by 2020, while Iranian propylene capacity is forecast to grow by an average of 15% per year to 3 mtpa by 2020, spurred by future methanol-to-olefin and methanol-to-propylene projects.

Mukherjee also expects the country’s polypropylene capacity to double from 1 mtpa in 2015 to 2 mtpa in 2020.

According to Mukherjee, the cash cost of producing ethylene from Iranian ethane is an estimated at $50-$80 per ton, making it one of the most competitive in the world. In early 2016, Iran cut the price of feedstock gas price for petrochemical plants by almost a third, from $130/'000m3 to $80/'000m3.

INEOS and CP Chem delay planned turnarounds

INEOS Olefins and Polymers USA and Chevron Phillips Chemical (CP Chem) are delaying planned outages in their Texas ethylene facilities, Platts reported on March 3.

The startup date for CP Chem's 50-day outage at Sweeny No. 24 in Old Ocean was pushed back to mid-March, two weeks later than planned. Ineos' Olefins No. 1 in Alvin was pushed back into early April, a 3-4-week delay .

CP Chem operates three steam crackers at the Sweeny site, with estimated combined ethylene production capacity of 1.9 mtpa, while Ineos operates two plants at its Alvin site, with combined capacity of 1.814 mtpa.

Total, Saudi Aramco study Saudi Arabia refinery expansion

Total and Saudi Aramco are considering expanding their joint refinery project in Saudi Arabia by 10% to 440,000 barrels per day, Reuters reported on February 23, citing Philippe Sauquet, head of Total's refining and chemicals division.

According to Sauquet, a decision on the expansion of the Saudi Aramco Total Refining and Petrochemical (SATORP) plant, which was started up in 2014, will be made in the next six months.

If approved, the expansion will take more than one year and will include clearing bottlenecks from existing production, Sauquet said.