Chevron Phillips, QatarEnergy Plan Texas Polymer Plant

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QatarEnergy and Chevron Phillips Chemical (CPChem) are moving forward with a massive $8.5 billion polymer plant on the Texas coast after reaching a final investment decision (FID) on the project.

The firms say that the Golden Triangle Polymers Plant would house the largest ethylene cracker and the two biggest high-density polyethylene units in the world when it is slated to come on line in 2026.

The project also represents QatarEnergy’s second-largest investment in the US, after the $11 billion investment in the Golden Pass LNG project, where it is partnered with Exxon Mobil.

The polyethylene produced at Golden Triangle will be sold primarily to Asia, Europe and Latin America, the firms said in a joint announcement on Wednesday.

‘Advantaged Producers’

Analysts said the project timeline makes sense, given ongoing growth in global petrochemical demand.

Energy Intelligence Director of Oil Markets Research Abhi Rajendran said it “makes sense to add more plants, including in US from advantaged producers.”

Matthew Blair, the head of chemicals, refiners and renewable fuels equity research at Tudor Pickering Holt (TPH), noted that polyethylene capacity additions will slow down after the 2023-24 timeframe. TPH sees capacity growing by 3% in 2024 and 1% in 2025, compared to 7% this year and 5% next year.

“The timing could end up being very good for this project,” Blair told Energy Intelligence.

Project Scope

The CPChem-QatarEnergy plant site is located about 180 kilometers from Houston in the “Golden Triangle” industrial corridor that runs through the Beaumont, Port Arthur and Orange hubs of East Texas.

As planned, the cracker will have a capacity of 2.08 million tons per year, and the polyethylene units will be capable of producing 2 million tons/yr combined. The firms said the new plant’s greenhouse gas (GHG) footprint would be about 25% lower than similar facilities in the US and Europe.

CPChem, which is a 50/50 joint venture between Chevron and Phillips 66, will manage engineering, procurement and construction for the project and will operate the facility after it starts up. The firm has already lined up a number of contractors including Zachry Industrial, Kiewit Energy, Emerson Process Management and JGC America.

The plant will be owned by Golden Triangle Polymers, a joint venture in which QatarEnergy holds a 49% equity interest, with 51% held by CPChem. The partners are also building a similar plant at Ras Laffan in Qatar together.

QatarEnergy CEO Saad Sherida al-Kaabi said the FID represents a “major step in the implementation of our downstream strategy and the next phase of QatarEnergy’s growth, which includes major investments in ethylene, ethylene derivatives and polymers in general.”

NGL/LPG, Corporate Strategy , NOCs, Oil Products, Chemicals
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