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OxyChem, Mexichem Form JV for Texas Cracker

Occidental Chemical Corp. (OxyChem) and Mexichem S.A.B. de C.V. (Mexichem) have formed joint venture (JV) Ingleside Ethylene LLC to build a 1.2 billion-pound-per-year capacity ethylene cracker at the OxyChem plant in Ingleside, TX, along with pipelines and storage at Markham, TX, the partners said Thursday.

Essentially all of the ethylene produced from the cracker is to be consumed in the manufacture of vinyl chloride monomer (VCM) utilizing existing VCM capacity. VCM will be delivered to Mexichem to produce polyvinyl chloride (PVC) and PVC piping systems.

"The ethylene cracker will strengthen the position of Mexichem by taking advantage of competitive energy and feedstock costs in the United States resulting from shale gas development," said Mexichem Chairman Juan Pablo del Valle Perochena.

OxyChem, which will build and operate the cracker, has taken a number of steps needed to begin construction, including completing the front-end engineering and design (see Shale Daily, Oct. 11, 2012). It has also received draft permits from the Texas Commission on Environmental Quality and applied for U.S. Environmental Protection Agency permits.

OxyChem, a wholly owned subsidiary of Occidental Petroleum Corp., said it expects to award the engineering and construction contract during the fourth quarter, with construction beginning in mid-2014. The facilities are expected to be commercially operational in the first quarter of 2017.

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