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OxyChem gets EPA approval for new cracker

By: Gayle S. Putrich

May 30, 2014

WASHINGTON — A joint venture between Occidental Chemical Corp. and a Mexico-based PVC and specialty chemicals firm has a green light from the U.S. Environmental Protection Agency to build an ethylene cracker in Ingleside, Texas.

EPA issued the final greenhouse gas Prevention of Significant Deterioration (PSD) construction permits on May 29.

 “OxyChem’s new plant will make the most of the company’s resources,” said EPA regional administrator Ron Curry in a news release. “Reusing feedstock and waste heat shows that being as efficient as possible is good for business and the environment.”

 The cracker will produce approximately 1.2 billion pounds per year of ethylene using cracking furnaces equipped with selective catalytic reduction technology to control emissions of nitrogen oxides, as part of a 50-50 venture with Mexican PVC and specialty chemicals maker Mexichem SAB de CV.  The cracker will be owned and operated by Los Angeles-based OxyChem.

 Nearly all of ethylene produced will be used on-site in the manufacture of vinyl chloride monomer (VCM). The project is expected to create 1,700 construction jobs and add 150 permanent jobs once operations begin in the first quarter of 2017.

 The cracker joint venture is the second involving a Mexican company to be announced in the past three years. In March 2010 Brazilian petrochemicals giant Braskem SA and Mexico's Grupo Idesa SA de CV formalized an agreement with Pemex Gas y Petroquímica Básica to build a $2.5 billion petrochemical complex, called Ethylene XXI, in Coatzacoalcos, which will include an ethylene cracker and three polymerization plants. Production at that site is scheduled to start in late 2015.

 Mexichem and Oxychem initially announced their joint venture plans in August 2012, spurred by increased shale gas development, though getting U.S. federal permission slowed the project some.

 As of 2011, EPA requires an air permit for any project that could significantly increase greenhouse gas emissions.

 “EPA believes states are best equipped to run GHG air permitting programs,” the agency said in its May 29 news release, though the agency rejected Texas’s initial clean air permitting program. The state says it is working to replace the federal implementation plan with its own program, which would eliminate the need for businesses to seek air permits from EPA.

 EPA says it has finalized 40 greenhouse gas permits in Texas, proposed an additional 10 permits and currently has over 22 additional permit applications under review and permit development in Texas.