Chevron Phillips Chemical Co. LLC and Qatar Petroleum (QP) are stepping up to take advantage of Lower 48 natural gas and plan to jointly develop a huge petrochemical plant on the Gulf Coast that would include an ethylene cracker and two high-density polyethylene units.
The estimated $8 billion U.S. Gulf Coast II Petrochemical Project, aka USGC II, would include a 2 million metric ton/year (mmty) ethylene cracker and two 1 mmty high-density polyethylene units. Chevron Phillips, as majority owner with 51%, would provide project management and oversight, as well as operate and manage the facility.
No specific site has been disclosed, but the “location would be in the Gulf Coast region, where there is direct access to the significant shale natural gas liquid reserves of the Permian Basin,” the partners said. A final investment decision is expected by 2021, with targeted startup in 2024.
“Qatar Petroleum is already a terrific partner of Chevron Phillips Chemical on petrochemical plants in Qatar, and we look forward to expanding our relationship in the United States as we jointly seek to develop a new petrochemical facility along the U.S. Gulf Coast,” said Chevron Phillips CEO Mark Lashier. “Qatar Petroleum’s financial strength, its commitment to safety as a core value and shared belief in our strategy to build facilities located close to competitive feedstocks make this an ideal relationship.”
The latest agreement would “further cement the strong partnership between our two companies and to complement Qatar Petroleum’s international portfolio in the United States, which is a core growth area for us as we believe it has great prospects and growth opportunities,” said Qatar Petroleum CEO Saad Sherida Al-Kaabi.
At peak construction, USGC II would support an estimated 9,000 construction jobs and once operational, about 600 full-time positions.
Last month the two companies agreed to joint venture (JV) to build a massive petrochemical complex in Qatar at the Ras Laffan Industrial City. The companies already operate Qatar Chemical Co. Ltd. and Qatar Chemical Co. II Ltd., as well as the Ras Laffan Olefins Co.
Chevron Phillips is equally owned indirectly by Chevron Corp. and Phillips 66, and it is headquartered in The Woodlands, north of Houston. State-owned Qatar Petroleum is responsible for developing oil and gas in Qatar and beyond.
QP supplies about one-third of the world’s liquefied natural gas (LNG). To ensure it continues to be an LNG leader, the country in 2017 lifted a decade-long moratorium on its North Field development to increase gas output and launch a petrochemicals project, which it said at the time would include the largest ethane cracker in the Middle East.
Already underway on the Texas coast is Gulf Coast Growth Ventures (GCGV), a JV between ExxonMobil Corp. and Saudi Basic Industries Corp., aka SABIC, to build what has been billed as the world’s largest ethane cracker.
However, if the Chevron Phillips/QP project is sanctioned, it would be larger than the 1.8 mmty project now underway by GCGV near Corpus Christi in San Patricio County.