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Petrochemicals

CP Chem's new Texas PE plants reflect optimism for plastics demand: officials

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Americas petrochemicals outlook, w/c Sep 24

CP Chem's new Texas PE plants reflect optimism for plastics demand: officials

Houston — Chevron Phillips Chemical unveiled Friday its two new polyethylene plants in Sweeny, Texas, nearly two months after their initial startup.

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"All those resins will be going worldwide," CP Chem CEO Mark Lashier said of output from the two plants, which have a combined capacity of 1 million mt/year.

Lashier spoke to employees and industry players near the new plants at the company's refinery, natural gas liquids and chemical complex in Sweeny.

The plants, which make resins used to make everything from grocery bags and plastic wrap to cookie packaging, bulletproof vests and drain pipes, are among 14 new PE plants along the US Gulf Coast starting up this year through 2019, with more to follow in second and potentially third waves into the 2020s.



Dow Chemical also started up a new 400,000 mt/year PE plant in September and ExxonMobil Chemical started up one of two new 650,000 mt/year PE plants in Mont Belvieu, Texas, last month.

Three more new PE startups are expected before year-end: ExxonMobil's second Mont Belvieu plant and Ineos and Sasol's joint-venture 460,000 mt/year plant in La Porte, and Dow's 350,000 mt/year plant at its Plaquemine, Louisiana, complex.

Eight new steam crackers also are starting up this year through 2019, with two in Texas already in operation: OxyChem's 544,300 mt/year cracker near Corpus Christi and Dow's 1.5 million mt/year plant in Freeport.

While Hurricane Harvey's landfall on the Texas Coast delayed CP Chem's startup of the new PE plants by a few weeks, the storm's flooding pushed the company's new 1.5 million mt/year cracker's mechanical completion and initial startup to the first half of 2018 from late 2017. "We look forward to starting up that cracker next spring," Lashier said.

Harvey hit the Sweeny and Freeport area with heavy rain, but the company's Cedar Bayou complex alongside the Houston Ship Channel took on five- eight feet of water, forcing lengthy shutdowns of existing infrastructure at that complex as well as work on the new cracker. Then it had to dry out with repeated testing of instrumentation to ensure it would work.

CP Chem has restarted two of three existing PE plants at Cedar Bayou post-Harvey, as well as a hexene unit that provides critical feedstock to multiple PE producers. The existing 835,000 mt/year cracker and third PE unit are expected to restart in the coming weeks.

ExxonMobil also delayed startup of a new 1.5 million mt/year cracker at its Baytown refining and chemical complex to early 2018 because of Harvey.

CP Chem will export Texas-produced resin from multiple US ports. The company already exports PE from the Port of Charleston, South Carolina, as well as Port Houston, the second-largest petrochemical port in the world.

The company also intends to ship resin out from the US West Coast, and has 2,750 new hopper rail cars to move loose pellets to packaging companies to put in bags to load onto export containers, executives said.

Tim Taylor, president of Phillips 66, the co-parent of CP Chem with Chevron, said on Friday that the companies remain optimistic about global plastics demand growth prompting and second and potentially third waves of new petrochemical infrastructure to capitalize on cheap US ethane for feedstock.

He noted CP Chem has said it expects to decide in 2018 or 2019 whether to move ahead on yet another new cracker.

"I hope we do the next one," he said.

--Kristen Hays, kristen.hays@spglobal.com
--Edited by Richard Rubin, richard.rubin@spglobal.com