Chevron Phillips Nears Completion of $6 Billion Petrochemical Project

HOUSTON, TX -- Chevron Phillips’ Baytown expansion project is about 80 percent complete and should be operational late next year, officials said.

The $6 billion U.S. Gulf Coast Petrochemicals Project -- a huge ethane cracker the size of 44 football fields -- is being built at the Cedar Bayou plant in Baytown, and will use natural gas to produce 1.5 metric tons of ethylene annually.

Once it is produced, the ethylene will be shipped to facilities in Sweeney, south of Houston, which are currently under construction.

Once it arrives there, the ethylene will be turned into plastic resin that will be used at other facilities globally.

Ron Corn, Chevron Phillips senior vice president of projects and supply chain, told FuelFix that Chevron Phillips had focused most of its growth in the Middle East with major projects in Qatar and Saudi Arabia six years ago, which helped create this massive petrochemical project.

It was quite radical at the time,” Corn said of building massive petrochemical projects in Texas. “These are big, big projects — very complex.”

The project is possible because of the pendulum swing in the Houston economy in recent years from oil to natural gas.

The shift has resulted in a petrochemical boom in communities like Baytown and other areas of the Gulf Coast where cheap ethane derived from natural gas through the ongoing shale fracking operations.

The American Chemistry Council has estimated that this boom will create more than 70,000 jobs and that more than 250 petrochemical projects are under construction or planned across the country through 2023.

The combined cost of these projects is estimated at about $160 billion, including about $50 billion in Texas.

The Chevron Phillips cracker includes eight giant furnaces that essentially heat up the ethane and cook it into ethylene.

The project has created 10,000 temporary construction jobs — Baytown and Old Ocean combined — and 400 new permanent positions once it’s completed.
Other petrochemical companies are also building ethane crackers of their own.
Exxon-Mobil is building a cracker with 1.5 million tons of capacity, with theirs being located nearby in Mont Belvieu, and Houston-based Occidental Petroleum Chemical and Mexico’s Mexichem have another cracker going up outside of Corpus Christi.

Exxon is also looking at another site to build the world’s biggest ethane cracker in a joint venture with the Saudi Arabia Basic Industries Corp., known as SABIC.

The site for this facility will either be Texas or Louisiana, officials said.

Corn said he’s convinced global plastics demand is growing quickly enough to consume the upcoming supply explosion.

“The spotlight is on the U.S., and the world needs the U.S. production,” Corn said.

Image: Roy Luck via Flickr