Phillips Petroleum Co. may be northward bound with a major polyethylene and ethylene production facility proposed for Alberta, Canada.
The complex, with a potential start-up date of 2003, would be capable of producing 1.1 billion pounds of PE resin and 1.2 billion pounds of ethylene each year. Phillips, of Bartlesville, Okla., is North America's third largest maker of high density PE and plans to advance in the linear low density PE market to take advantage of its metallocene technology.
Jack Howe, Phillips' senior vice president, commented on the Alberta project in a recent company newsletter.
``With our Sweeny, Texas, and Houston Chemical Complex facilities nearly filled out from a petrochemical and plastics standpoint, we want to continue to grow the U.S. market,'' Howe said.
Phillips is interested in Alberta because of its ethane feedstock supply, desirable political climate and access to U.S. and Asian markets, Howe added.
The company has launched a feasibility study, including premise setting and early engineering, which should be completed early next year, according to project development manager Tom Hall.
If the project proceeds as planned, it could head to Phillips' board of directors for approval in late 1999 or early 2000, and construction would begin in 2000 as well, Hall said in a telephone interview from Bartlesville.
Officials at Phillips and at a leading petrochemicals consulting firm disagreed, however, on the effect that adding 1.1 billion pounds of PE to the market would have in 2003.
``Our timing was based on when we thought the market would reach a better supply-demand balance,'' Hall said. ``We think the market will be on the upswing in 2003 and will be able to absorb the additional capacity.''
But market projections from DeWitt & Co. of Houston show the PE industry still will be operating at less than 80 percent capacity in 2003 because of overcapacity that's already negatively affecting resin prices and profits.
``The timing isn't good,'' DeWitt consultant Pat Duke said in a telephone interview from Houston. ``The market should just about be beginning to come out of the doldrums then, and adding capacity won't help.''
But Duke added that Phillips' selection of Alberta ``makes all the sense in the world,'' because the region offers North America's lowest cost point for petrochemical feedstocks, and trails only Venezuela and Saudi Arabia in that category on a global basis.
Although the exact location and cost of the Alberta project, which could create as many as 400 permanent jobs, have not been made public, officials said the plant would be similar to the plant Phillips will launch in Qatar in 2001.
Phillips is looking into sole ownership of the Alberta Project, but may consider other partners in a joint venture, Hall said.
``If another company is interested in ethylene derivatives, we'd be amenable to something of that nature,'' he said. ``But the project isn't dependent on a joint venture.''