THE WOODLANDS, TEXAS (Dec. 15, 10:30 a.m. ET) — Cross this one off the list of things that were never going to happen again: New polyethylene capacity is headed for the
Chevron Phillips Chemical Co. LP is forging ahead with a massive project that will add two PE plants with total annual capacity of 2.2 billion pounds. The plants will be located either at the firm's Cedar Bayou complex in
Final site selection is set for the first quarter of 2012. The total cost of the project is estimated at $5 billion.
The PE plants are part of a larger project that will install a new ethylene feedstock cracker – using natural gas-based ethane - with annual capacity of 3.3 billion pounds in
“We are pleased that the development of shale gas resources in the United States has set the stage for major petrochemical investment and job creation in our own backyard,” President and CEO Peter Cella said in a Dec. 14 news release.
Officials with Chevron Phillips – based in The Woodlands,
Chevron Phillips ranks as
Market analyst Phil Karig – managing director of the Mathelin Bay Associates LLC consulting firm in
That description includes continued availability of low cost shale gas and no crippling restrictions on hydraulic fracturing, as well as continued modest resin demand growth in the
PE market analyst Mike Burns was a bit cautious in his assessment of Chevron Phillips' plans, since the global PE market currently is oversupplied and exports of PE from North America – which in the past “have kept reactors running” – are down this year as well.
“On paper, you have to ask where the pounds are going to go,” said Burns, who's with Resin Technology Inc. in
Burns added that some older PE plants in North
If that's what the election yields, the economics of a new (PE) plant could change substantially,” Karig said.
Chevron Phillips is one of several companies that earlier this year announced plans to expand its petrochemical operations in
Ethylene supplier Shell Oil Co. also is expanding with plans to build a new cracker at a site in
The shale gas boom has altered the landscape and perceptions of the
The Marcellus shale basin – covering a large part of
“We're talking about a supply of 100-plus years and growing,” Williams Cos. Inc. CEO Alan Armstrong said at an industry conference in March. Williams is one of the country's 10 largest natural gas suppliers and is developing several new fields.