Sector News

Chevron Phillips Chemical zeros in on Orange, Texas for next cracker

February 12, 2019
Energy & Chemical Value Chain

Chevron Phillips Chemical (CPChem) is leaning toward Orange, Texas as the site for its next ethane-based steam cracker, the company tells CW. “At this point in time, Orange, Texas, is a finalist undergoing due diligence for a new petrochemical investment if we make a final investment decision to proceed. However, the location is only one of the alternatives we are considering along the US Gulf Coast. It would simply be premature to say that Orange is definitively where we would put a new petrochemical facility if we decide to build one,” the company says. The company currently operates two high-density polyethylene (PE) units at an existing site in Orange, which is about 120 miles east of Houston, Texas.

CPChem last March completed construction of its 1.5 million metric tons/year ethylene plant at Cedar Bayou, Texas and said that it was thinking about investing in another facility. Referring to future investments in petchems, CEO Mark Lashier told the Houston Chronicle last month that demand for “polyethylene is growing [at such a pace] that the world needs about four or five of these big cracking complexes a year.”

CPChem recently applied for tax incentives for a possible cracker and downstream units in Orange County, according to government documents. The company said that the cracker would be worldscale and provide feedstock for other units to make PE. Construction would start in the second quarter of 2020 with commercial operations in the third quarter of 2024, according to the documents. The applications were made to the Bridge City and West Cove-Orange school districts but did not reveal the total value of the project.

“We remain very encouraged by the fundamentals supporting an additional petrochemical investment in the US Gulf Coast,” CPChem said in a statement. “The availability of competitive feedstocks in the region and growing worldwide demand for our products appear to support such an initiative. However, it would be premature to make an announcement on the specifics of the project.”

By Natasha Alperowicz

Source: Chemical Week

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