Daily GPI / NGI The Weekly Gas Market Report / NGI All News Access

Sasol, Ineos to Partner in New Polyethylene Plant on Texas Gulf Coast

A partnership between units of Sasol Ltd. and Ineos Europe AG has reached a final investment decision (FID) to build a high-density polyethlyne (HPDE) plant in the La Porte, TX petrochemical complex southeast of Houston.

Sasol Chemicals (USA) LLC and Ineos Olefins & Polymers USA agreed to form a joint venture and proceed with the project, first announced last year (see Daily GPIJuly 25, 2013). The 50-50 partnership plans to produce 470 kilotons/year of bimodal HDPE. Ethylene required to produce HDPE would be supplied by each partner for the La Porte plant, which is to be built at the Battleground Manufacturing Complex operated by Ineos.

La Porte is home to the Barbours Cut Terminal and Bayport, both operated by the Port of Houston, which serve international trading operations.

"This project will expand Sasol's presence in the global chemical market and complement our North American growth strategy," said Sasol's Fleetwood Grobler, group executive for global chemicals. "Its location offers several benefits, including access to U.S. Gulf Coast infrastructure and proximity to our current and proposed ethane cracker and derivatives complex in Southwest Louisiana."

Sasol is poised to make a make a FID this year also on a natural gas-to-liquids project in Westlake, LA (see Daily GPIApril 30Dec. 4, 2012). The plant, if built, would produce up to 96,000 b/d, making it the second largest of its kind after Royal Dutch Shell plc's Pearl plant in Qatar (see Daily GPIMarch 25, 2011).

"We continue to make progress on the front-end engineering and design work and are currently finalizing the capital cost estimate and associated contracting strategy" for the Westlake plant, management said. Sasol needs to secure $5-7 billion to build the facility; if approved, operations could begin in 2017.

The South African behemoth is the world's largest manufacturer of synthetic fuels, with synfuel production this year forecast to be 7.3-7.5 million metric tons . Last year Sasol produced 7.44 million tons, with synfuels comprising 71% of operating income.

A price tag for the La Porte facility hasn't been announced, but all of the requisite permits have been secured, the partners said. The plant would produce HDPE using Innovene S, a process technology licensed by Ineos Technologies.

"This investment will allow Ineos to meet our customers' needs for additional bimodal products," said Ineos Olefins & Polymers CEO Dennis Seith. "It also supports Ineos' strategy to invest and to capture synergies on our major sites."

Because the plant is to be debt financed, the investment decision is conditional on achieving a financial close.

Several other operators are considering new or expanded facilities southeast of Houston in the country's largest petrochemical complex. Among them is ExxonMobil Chemical Co., which is planning a multi-billion-dollar expansion of the Baytown complex (see Daily GPIMarch 7, 2013). Last fall, Chevron Phillips Chemical Co. LP (CPChem) received the green light to proceed with the US Gulf Coast Petrochemicals Project, (see Daily GPIOct. 4, 2013). CPChem's two polyethylene facilities each would have an annual capacity of 500,000 metric tons.

Late last year LyondellBasell restarted a methanol plant near La Porte in Channelview, TX (see Daily GPI ,Jan. 3). LyondellBasell also is expanding ethylene capacity at the La Porte, Channelview and Corpus Christi facilities to add 1.8 billion pounds/year to capacity; a polyethylene plant in Matagorda County also is being expanded.

Recent Articles by Carolyn Davis

Comments powered by Disqus