HOUSTON — Equistar Chemicals LP is touting the advantages of ``time-share crackers'' to allow ethylene users to benefit from the economics of world-scale plants without having to deal with the excess capacity such plants sometimes create.
Under the arrangement, customers needing ethylene for three to 10 years would buy capacity from Equistar, the world's second-largest ethylene maker, and pay for the capacity commitment as if it were making a capital investment in a debottlenecking project or new plant.
The plan is designed for companies with growing ethylene needs but that haven't reached a point where they can build a world-scale ethylene plant of their own, said Equistar president and chief operating officer Eugene Allspach. Allspach spoke at the CMAI World Petrochemical Conference in Houston.
The time-share proposal is a way for Houston-based Equistar, a joint venture between Lyondell Petrochemical Co., Millennium Chemicals Inc. and Occidental Chemical Corp., to weather the storm of ethylene overcapacity.
``These cycles aren't typical demand cycles, they're caused by the way capacity is being added,'' Allspach said. ``Seventy-five percent of mergers fail, but we're working hard to avoid being one of the road-kill mergers that didn't work.''