THE WOODLANDS, TEXAS (April 30, 9:45 a.m. ET) — Chevron Phillips Chemical Co. LP has picked Old Ocean, Texas, as the site of both of its new polyethylene plants.
Chevron Phillips – based in The Woodlands, Texas – in December had announced plans to build the new plants, which will have combined annual capacity of 2.2 billion pounds of PE. The selection of OldOcean was confirmed in an April 30 news release.
The firm also considered Baytown, Texas, as a possible location for the new PE plants. Chevron Phillips is building a new ethylene cracker in Baytown that will have annual capacity of 3.3 billion pounds. Both the cracker and the new PE plants are expected to open in 2017. The projects are expected to create 400 permanent jobs and 10,000 temporary engineering and construction jobs. The total cost of the project is estimated at $5 billion.
Choosing OldOcean as the site of the new PE plants “better positions the location for potential future investments,” Chevron Phillips president and CEO Peter Cella said in the release.
“This project would benefit our owners, employees, local communities, customer and suppliers,” he added.
The PE units will be designed by Jacobs Engineering Group Inc. of Pasadena, Calif. The Shaw Group of Baton Rouge, La., will design the ethylene cracker.
New PE and ethylene projects from Chevron Phillips and other North American firms are being driven by newfound supplies of natural gas in the region. Those finds are providing petrochemical makers with long-term supplies of an affordable feedstock, and in turn is giving them confidence to announce investments in the region. Between 2000 and 2010, more than 16,000 miles of new interstate gas pipeline were installed in the U.S. to access the new supplies.
Chevron Phillips ranks as North America's largest maker of high density PE with a market share of 20 percent of annual capacity. The firm also ranks fourth in low density PE with an 8 percent share and sixth in linear LDPE with a 4 percent share.
Other North American firms that have announced shale gas-based expansion plans include Dow Chemical Co., Shell Oil Co., Westlake Chemicals Corp., Nova Chemicals Corp. and Formosa Plastics Corp. USA.