Braskem is moving forward with its largest polypropylene (PP) production line in the Americas, a $675 million facility sited on the Houston Ship Channel in La Porte that would take advantage of abundant stores of Lower 48 natural gas.
The final investment decision for the Delta project, sited adjacent to Braskem’s existing production facilities, was announced Thursday.
"Our approval to proceed with the capital investment in Delta is the latest major milestone in Braskem's global growth strategy,” said CEO Fernando Musa. “This new world-class petrochemical facility will bring important new North American production capacity to help us meet the growing demand from our clients,” and reaffirm the company as the leading PP producer in the Americas and the third largest in the world.
The engineering design phase is “well underway,” with the new production line slated to have a manufacturing capacity of 450 kilotons (kt), or the equivalent of about 1 billion pounds/year.
Braskem, considered the largest U.S. thermoplastic polyolefins (TPO) producer, is headquartered in Brazil, with domestic headquarters in Philadelphia. Braskem has 41 plastics and chemical companies located in Brazil, the United States, Germany and Mexico. The company is the leading PP producer in the United States, with six production plants in Texas, Pennsylvania and West Virginia, and an Innovation and Technology Center in Pittsburgh.
"Leveraging the success of shale gas energy production, North America has among the most attractive feedstock profiles worldwide in terms of access to low cost sources of feedstock and the depth of suppliers,” Musa said.
No new PP plants have been added in North America since 2005, and the United States became a net PP importer in 2016, Musa said. “As such, our additional investment in the United States is a logical extension of our global growth strategy. By increasing our production capacity in close proximity to customer demand, attractive feedstock as well as established export channels, we believe Delta will serve our clients well and offer an attractive return on our investment for our shareholders.”
Construction would be on part of 200 acres of land at the current facility, which is about 26 miles from Houston in the petrochemical complex that traverses the Houston Ship Channel.
The new line would provide additional production capacity of homopolymers, random copolymers, impact copolymers, and reactor TPOs, building upon Braskem's current PP production plant in La Porte, which has a production capacity of 354 kt/year. The current plant is to continue continue operations.
The announcement also builds on the recent launch of Braskem’s UTEC Ultra High Molecular Weight Polyethylene production plant, also sited in La Porte.
Delta would benefit from significant existing support infrastructure in place to accommodate the new line, including feedstock and utilities connectivity, rail infrastructure, central control room and testing facilities, emergency response equipment, waste treatment facilities and more.
During the construction phase of Delta, Braskem expects to employ about 1,000 people. When completed the new line would provide 50 full-time jobs.
Construction is expected to begin by mid-summer, with the final phase targeting early 2020. Braskem management said facility design would be developed in line with its commitment to “sustainability and attention to eco-indicators such as emissions, water and energy efficiency, as well as recycling and waste reduction.”