Many US cracker projects moving along as expected, earnings calls show

Total aims to decide this year whether to move forward with a second steam cracker at its refining and petrochemical complex in Port Arthur, Texas, executives said last week. The French oil major launched front-end engineering and design (FEED) for the 1 million mt/year ethane side cracker in September 2015, with plans to make the final investment decision (FID) by the end of 2016.

Chief Executive Patrick Pouyanne said during the company’s quarterly earnings call that two years of slow project sanctions amid low oil prices globally has left suppliers and contractors “desperately hungry for projects,” and the company expects to move ahead on nearly a dozen of them, mostly upstream. The cracker is the only downstream project in the mix. Chicago Bridge & Iron has handled the FEED contract for the cracker.

Dow Chemical’s new 1.5 million mt/year Texas cracker was 95% complete in January with more than half of inside unit operations undergoing commissioning and startup, Jim Fitterling, Dow’s president and chief operating officer, told analysts in late January. The plant and two derivative polyethylene plants remain on target to start up in mid-2017.

An additional 250,000 mt/year of capacity at a Dow cracker in Plaquemine, Louisiana, started  up in late 2016 after a turnaround, pushing overall capacity to about 1 million mt/year. The facility also can now crack more than 80% ethane while maintaining flexibility to switch to propane from ethane, he said.

LyondellBasell last month announced completion of its 363,000 mt/year ethylene expansion in Corpus Christi, Texas, which will boost output by 50% to 1.13 million mt/year.

Royal Dutch Shell’s 1.5 million mt/year ethane cracker complex in southwest Pennsylvania will mark the company’s re-entry into polyolefins, Chief Executive Ben van Beurden told analysts this month. Shell exited polyolefins “in a very difficult, convoluted way” through joint ventures in the past, but the new project will sustain Shell’s position as a polyolefins player, he said.

Shell and BASF formed their Basell Polyolefins joint venture in 2000, but Access Industries bought it in 2005 and merged with Lyondell in 2007 to form LyondellBasell.

Shell is seeking necessary permits for the Pennsylvania project and expect to begin construction in earnest by the end of the year or early 2018, van Beurden said.

“We haven’t announced exactly when it will start up but I expect that to be not anymore this decade, because it is a very large greenfield project,” he said. “We have gone quite a long way already in terms of getting the site ready.”

ExxonMobil’s 1.5 mt/year ethane cracker in Baytown, Texas, and two polyethylene plants in nearby Mont Belvieu remain on track to begin phased startups in the second half of 2017, according to Jeff Woodbury, vice president of investor relations. Those projects and a 650,000 mt/year polyethylene  expansion at the company’s complex in Beaumont will increase Exxon’s US PE production by 40%, or nearly 2 million mt/year, making Texas its largest PE supply point.

Exxon and Saudi Basic Industries Corp (SABIC) are still considering four potential sites for a new joint-venture petrochemical complex in Texas and Louisiana, but their preferred site is near Portland, Texas, across the Nueces Bay from Corpus Christi in San Patricio County. SABIC spokeswoman Susan LeBourdais said the companies will not choose a site until “more is known” about the companies’ requests for tax abatements from the county and local school districts.

The San Patricio County site is a few miles from Occidental Petroleum Corp.’s joint-venture 550,000 mt/year cracker in Ingleside, Texas. Occidental Chief Executive Vicki Hollub told analysts last week that the plant, a joint venture with MexiChem, is undergoing commissioning with startup on target for the first quarter this year.

Enterprise Products Partners expects to load more than 5 million barrels of polymer-grade propylene cargoes from the Houston Ship Channel this year, double the amount the company shipped out in 2016. Chief Executive Jim Teague told analysts the company sold its first PGP export cargo to Asia, and at 160,000 barrels, it was more than double the typical size of a propylene cargo.

US International Trade Commission data show the US exported 392,811 mt of propylene through November of 2016, up 43% from all of 2015.

Enterprise also announced plans to build a 425,000 mt/year isobutene dehydrogenation unit in Mont Belvieu to start up in the fourth quarter of 2019. Isobutylene produced by the plant will feed Enterprise’s underused capacity to manufacture lubricants, rubber products, MTBE for export and alkylate. Refiners will seek more octane-boosting blendstocks like alkylate in the coming years as fuel economy standards increase and auto manufacturers produce more high-compression vehicles.

Chevron Phillips Chemical’s two new polyethylene units in Sweeny, Texas, are in commissioning phases while the new 1.5 million mt/year ethane cracker nearly 90 miles away in Baytown, Texas, is on track for completion during the fourth quarter, Phillips 66 President Tim Taylor told analysts this month. He said the PE unit startups in the summer will bring partial value uplift to the company, but full value uplift will come in 2018 “as the cracker really comes online at that point” after startup costs are absorbed in the fourth quarter this year.