Chevron Chemical Co. is expanding its enhanced polyethylene menu by purchasing a manufacturing license for metallocene technology developed by BP Amoco plc and Dow Chemical Co. The technology will be used on a 440 million-pound-per-year PE line at Chevron's plant in Cedar Bayou, Texas. Commercial trials are expected late this year, with full commercialization in early 2001.
The license is the first granted by BP Amoco of London and Midland, Mich.-based Dow since the two firms formed a technology partnership in 1995. The technology incorporates Dow's Insite-brand metallocene catalysts with BP Amoco's Innovene process technology.
Chevron of Houston will have to make "relatively minor" changes to the Cedar Bayou line before making the switch, according to Mitch Eichelberger, the company's PE films and coatings business manager. The firm also produces about 500 million pounds of high density PE on a second line at the site.
The BP Amoco/Dow deal also opens up the possibility of Chevron offering three different enhanced PE products to its customers in the near future.
Chevron currently is commercializing PE made with Energx-brand technology it licensed from Eastman Chemical Co. last year. Chevron's pending petrochemicals merger with Phillips Petroleum Co. could add PE made with Phillips' own metallocene technology into the mix.
In addition, Chevron continues to work on metallocene projects of its own. Eichelberger declined to say when that technology would yield commercial products, but industry contacts said Chevron's metallocene work probably would be folded into the Phillips program after the joint venture is approved.
Eichelberger said the Eastman, BP Amoco/Dow and Phillips technologies each produce complementary products that won't compete with each other. For example, the Eastman-produced PE has excellent heat-seal properties, while the BP Amoco/Dow material is known for its processability, toughness and clarity.
"We've got two technologies secured with the possibility of adding a third," Eichelberger said. "There's a very large market for enhanced polyethylene film technology, and it's been very customer-driven. A lot of our customers have told us they want us to pursue this technology."
Jeff Gardner, vice president of technology licensing for Dow, agreed that offering several enhanced PE products is a step in the right direction.
"We think it's the best environment for the customer to have a wider range of products," Gardner said. "It's good for the whole polyethylene industry."
To incorporate the different technologies, Chevron needs to make sure it can switch conveniently among the various catalysts used in PE production, according to Bill Vernon, a consultant with Chemical Market Resources Inc. in Houston.
"Chevron has to ask themselves if they want to be a drugstore to the film industry," Vernon said. "At the end of the day, they're saying, `We were a commodity producer ... but now we can offer specialized products.'"
Vernon added that he was glad to see different catalysts being used in the PE industry, but said he wasn't sure if there would be a lot of differentiation in the grades of material that Chevron would produce.
"I can see a difference with the Eastman material, since those are made with advanced Ziegler-Natta catalysts instead of metallocenes, but there will probably be only subtle differences between the BP Amoco/Dow material and the Phillips material," he said. "I don't see one of those being drastically superior to the other."
Dow's pending merger with Union Carbide Corp. further muddies the metallocene mix.
If that merger and the Chevron/Phillips chemical joint venture are approved, Chevron/ Phillips will have a license with Dow/Carbide, while Dow/Carbide will be connected to Exxon Chemical Co. through the Univation Technologies venture Exxon formed with Carbide in 1996.
That circuitous link between Chevron/Phillips and Exxon could become a legal issue in light of Phillips' recent victory in a patent-infringement suit Exxon had filed against Phillips in 1991. Exxon is appealing that decision.