Perspectives: From the Editor
Chemical Industry: The Good News Grows
U.S. chemicals output should outpace previous estimates.
Prospects are even brighter for the U.S. chemical industry than they appeared six months ago, reports the American Chemistry Council (ACC), Washington, D.C. In late June, ACC released a report entitled “Mid-Year 2014 Chemical Industry Situation and Outlook” that points to a stronger upswing than it previously predicted: “The consensus is that U.S. chemical output will improve during 2014 and into 2015. Indeed, our current expectations for 2014 are 0.5 percentage points higher than our year-end 2013 outlook.” [That outlook was summarized in “U.S. Chemical Industry Gets into Better Tune."] “During the second half of the decade, U.S. chemistry growth is expected to expand at a pace (over 4% per year on average) exceeding that of the overall U.S. economy,” the report adds. Moreover, it continues: “With the development of shale gas and the surge in natural gas liquids supply, the U.S. has moved from being a high-cost producer of key petrochemicals and resins to among the lowest-cost producers globally. This shift in competitiveness is boosting export demand and driving significant flows of new capital investment toward the U.S…. In a stark reversal to the trends of a decade ago, American chemistry is poised for a dynamic period of growth.”
Announcements made by chemical producers in June certainly underscore the upbeat forecast.
For instance, Chevron Phillips Chemical, The Woodlands, Texas, held a groundbreaking at Old Ocean, Texas, for the second of two new polyethylene plants, each of which will have a nameplate capacity of 550,000 t/y. The press release about the event boasts: “With this groundbreaking, Chevron Phillips Chemical maintains its first mover position within the petrochemicals industry to engineer and build world-scale ethylene and derivative facilities in the U.S. based on the successful development of shale resources.” The company also announced in June that it had started up the world’s largest on-purpose 1-hexene plant, a 275,000-t/y unit at LaPorte, Texas.
Also that month, ExxonMobil Chemical, Houston, announced the start of construction of a multi-billion-dollar ethane cracker at its Baytown, Texas, complex. The steam cracker will be able to process up to 1.5 million t/y; it will supply ethylene feedstock to downstream units, including two new 650,000-t/y-polyethylene lines at the firm’s Mont Belvieu, Texas, plant. “The project is made possible in large part by abundant, affordable supplies of U.S. natural gas,” notes Steve Pryor, the company’s president.
In addition, Dow Chemical, Midland, Mich., announced in June that it would begin construction of a 1.5-million-t/y-capacity ethylene plant at Freeport, Texas. “This world-scale ethylene facility is a foundational element in Dow’s strategy to utilize low-cost and advantaged shale gas feedstocks to enable growth in key value-added market-driven businesses,” says Andrew Liveris, CEO. The facility is part of a multi-billion-dollar investment on the Gulf Coast that includes 200,000-t/y “next generation” Nordel ethylene-propylene-diene monomer, 320,000-t/y high-melt-index specialty elastomers, 400,000-t/y Elite polyethylene, and 350,000-t/y specialty low-density polyethylene facilities.
Meanwhile, also in June, INEOS Olefins & Polymers USA, Houston, and Sasol Chemicals North America, Houston, announced a decision to form a 50/50 joint venture to build a 470,000-t/y bimodal high-density polyethylene plant in LaPorte.
This testifies to the attractiveness to non-U.S.-based companies of investing in Gulf Coast facilities. INEOS is headquartered in Rolle, Switzerland, and Sasol is based in Johannesburg, South Africa.
Further pointing up the allure to foreign firms, Brazil’s Braskem also revealed in late June that it would build a new polyethylene plant at its complex in LaPorte. The unit will make ultra-high-molecular-weight polyethylene, and will mark the first time the company will produce the product outside of Brazil.
MARK ROSENZWEIG, Editor in Chief of Chemical Processing, can be e-mailed at firstname.lastname@example.org.
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