2017 Through the Rear-view Mirror
Part 6: Shale Gas Fuels US Investment
In the run-up to its merger with DuPont, Dow last year announced investments worth $4 billion to be realized over the next five years, including an expansion of its Texas cracker and additional polyolefin capacities in the US and Europe. Dow – or DowDuPont, as the case may be –will also invest in the polyurethanes chain, to drive growth downstream in specialty polyols and systems.
Capitalizing on the availability of cheap and abundant shale gas-derived feedstocks in the US Gulf region, the new Dow plants will go on stream in phases starting in 2020, downstream of the company’s new 1.5 million t/y new ethylene cracker in Freeport, Texas. A 600,000 t/y PE unit is planned to be built somewhere on the US Gulf.
Dow also said it would undertake a series of incremental global debottlenecking projects resulting in around 350,000 t/y of extra polyolefin capacity, mostly in North America. The company will also build a 450,000 t/y polyolefins plant in Europe, maximizing ethylene integration in the region.
SABIC and US energy giant ExxonMobil announced plans to perform a feasibility study for a joint petrochemical complex in San Patricio County, Texas. Potentially, the complex could comprise an ethane steam cracker that would produce 1.8 million t/y of ethylene to feed a monoethylene glycol unit and two PE plants. A final decision is anticipated some time in 2018.
The proposed complex is one of 11 major chemical, refining, lubricant and liquefied natural gas (LNG) projects in the US associated with ExxonMobil’s Growing the Gulf initiative that has resulted from the country’s shale-gas boom. The investments, which started in 2013, are anticipated to continue through at least 2022.
The board of directors at Brazilian petrochemicals producer Braskem last year formally approved plans for a 450,000 t/y PP plant at the company’s site in LaPorte, Texas. Costing up to $675 million, the facility, to be called Delta, would be the largest PP production line in the Americas, with capacity for homopolymers, random copolymers, impact copolymers and reactor thermoplastic olefins (TPOs).
Braskem already operates a 354,000 t/y PP plant at La Porte.
A firm start-up date has not been given, but the main phase of construction is targeted to begin in the first quarter of 2020. Braskem said Delta would leverage the US’ low-cost feedstock position.
LyondellBasell finally moved ahead with plans announced in 2014 to build a new shale gas-fed plant for propylene oxide (PO) and tertiary butyl alcohol (TBA) at its Channelview and Bayport complexes in Texas. The company said the $2.4 billion cost is the largest single capital investment in its history. Construction is expected to start in the second half of 2018 and complete in mid-2021.
LyondellBasell is also evaluating new PP capacity to support demand in the US, as well as a PDH unit to provide propylene feedstock. Decisions on both projects are expected in 2018.
Expansion projects announced for US
Eastman announced plans for a series of projects at its headquarters site in Kingsport, Tennessee, to raise capacity for cyclohexanedimethanol (CHDM), a polyester precursor. A program of debottlenecks and expansions is to take place over an 18 month-period, increasing capacity by 15,000 t/y, with all projects slated to be complete by early 2019. Eastman said the investments will enable it to meet increasing demand for copolyesters as well as other polyester products.
Earlier in 2017, the company said it planned to expand PETG capacity by about 20% at its copolyester site in Kuantan, Malaysia. The expansion is scheduled for completion in the first quarter of 2018. Elsewhere, Eastman said it would widen output of performance films at Martinsville, Virginia, by the end of 2017 to meet growing demand in automotive and architectural markets. Investment costs were not disclosed but the chemical group said the project would be its largest films expansion to date.
Invista announced plans to spend more than $65 million to expand nylon 6.6 fiber capacity at its plant in Camden, South Carolina. The Wichita, Kansas group said the investment will significantly increase domestic US capacity for high-tenacity specialty fibers used in Cordura fabrics for various military applications as well as in a wide variety of commercial and outdoor end-uses.
Although most new chemical projects announced in 2017 were petchems-related, not all were. Veramaris, the proposed joint venture between Evonik Nutrition & Care and DSM Nutritional Products, said it had chosen Blair, Nebraska, as the location for its proposed commercial-scale US plant for omega-3 fatty acids.
The plant, expected to go on stream in 2019, will be located adjacent to Evonik’s existing facility on Cargill’s site, with established access to raw materials. Each of the two companies will invest around $100 million in the project over roughly two years. Until Blair opens, DSM and Evonik will produce pilot-scale quantities of the algal oil at DSM’s plant in Kingstree, South Carolina.
To read more about the important events of 2017, click on the links below.
Part 1: The Rocky Road to Mega-mergers
Part 2: Chemical Producers Lead M&A Activity in 2017
Part 3: Pharma M&A quieter in 2017
Part 4: Distributors Proactive in M&A
Part 5: New Projects
Part 7: Timid Awakening of European Investment
Part 8: Asia sees ongoing investments