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Chevron Phillips, Qatar Petroleum to build $8bn petrochemical plant
US GULF COAST
CHEVRON Phillips Chemical – a joint venture between Chevron and Phillips 66 – and Qatar Petroleum (QP) have struck a deal to build an $8bn petrochemical plant on the US Gulf Coast. A nal investment decision (FID) on the scheme – known as the US Gulf Coast II Petrochemical Project – is expected in 2021, with start-up tar- geted to follow in 2024.
Chevron Phillips Chemical would be the majority owner with a 51% stake, while QP would own 49% in the scheme. e proposed project would include an ethane cracker with capacity to process ethane 2mn tonnes per year (tpy) of ethylene. It would also have two high-density polyethylene units, with a capacity to process ethylene into 1mn tpy of polyethylene – the most common plastic in the world.
Texas-based Chevron Phillips has not named the location of the project but said it would have direct access to natural gas from the Permian Basin – a by-product of drilling for tight oil in the booming shale region. e company previously said it was considering Orange, Texas as a site for potential expansion, among other locations
where it already operates.
This is the second major project Chevron
Phillips has undertaken in the region in the past two years a er starting up a new ethane cracker in Cedar Bayou. It comes as the Gulf Coast region is undergoing a new wave of petrochemical pro- ject expansion, with oil and chemical companies hoping to further capitalise on a boom in natural gas feedstock from the Permian.
Indeed, it was also announced this week, on July 9, that Lucid Energy Group had entered into a long-term gas-gathering and processing con- tract with ExxonMobil subsidiary XTO Energy. The deal includes gas and natural gas liquids (NGLs) deliveries to ExxonMobil’s petrochem- ical operations on the Gulf Coast.
e announcement comes as ExxonMobil and Chevron ramp up their shale production in the Permian Basin, leading to a boom in the production of associated natural gas and NGLs that can be used as petrochemical feedstock. However, takeaway capacity to the Gulf Coast from the Permian is being put under pressure as output of gas and NGLs booms.™
Enterprise in Houston Ship Channel expansion
US GULF COAST
ENTERPRISE Products Partners has unveiled plans to expand its exports of crude, propane, butane and petrochemicals from its terminals on the Houston Ship Channel in Texas.
e company said it was focusing on expand- ing its terminal south of Channelview. The expansion includes the construction of an eighth dock, which would increase its oil export capac- ity from Houston by almost 45%.
e company is also planning to grow its liq- ue ed petroleum gas (LPG) capacity) – primar- ily propane and butane. It said it would also add refrigeration storage capacity in the area, which will allow it to export more propylene.
“Our integrated midstream system, includ- ing our Houston Ship Channel terminal, is providing Texas products with access to the highest-value markets, including international markets,” said Enterprise’s CEO, Jim Teague. “ ese projects utilise the latest technology to modify and expand existing facilities and repre- sent a very e cient use of capital with attractive returns.”
Enterprise said it would add 840,000 barrels per day (bpd) of oil-exporting capacity, raising its total exports to 2.75mn bpd. e new dock would be able to accommodate Suezmax vessels
– the largest ship class that can navigate the Hou- ston Ship Channel, Enterprise said.
Enterprise also will add 260,000 bpd of new LPG export capacity, increasing its total LPG export capacity from the Houston Ship Channel to 1.1mn bpd. e company is also planning to build 67,200 bpd of additional propylene export capacity.
All of these capacity expansions are antici- pated to be completed by late 2020.
e expansion forms part of a plan to capital- ise on output from the booming Permian Basin, which is driving growth in US crude production. Associated production of natural gas and natural gas liquids (NGLs) in the region is also booming thanks to drilling for oil in the region.
Enterprise has also expanded the capacity of its storage and processing hub in Mont Belvieu, Texas.
Separately, the company is also proposing to build an oil export terminal o shore Texas that would be able to accommodate very large crude carriers (VLCCs), which are capable of carrying 2mn barrels of oil. e proposal comes as several other developers in the region have announced similar schemes. Not all of them will be built.™
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