LyondellBasell pulled the trigger Friday to build the world’s largest propylene oxide (PO) and tertiary butyl alcohol (TBA) projects in the Houston area, a $2.4 billion investment fed by U.S. natural gas that would be its single largest in company history.
Once in operation, the plant would serve domestic and international markets and annually would be able to produce 1 billion pounds (470,000 metric tons) of PO and 2.2 billion pounds (1 million metric tons) of TBA.
LyondellBasell has had the project on the drawing table for two years, and with the final investment decision (FID), it joins a plethora of gas-fueled petrochemical and export expansions underway along the Gulf Coast.
“This world-scale project is a key part of our organic growth strategy, which is designed to meet rising global demand for both urethanes and cleaner-burning oxyfuels while creating real, long-term value for our shareholders,” said CEO Bob Patel. “Our investment in this plant combines the best of both worlds: our leading PO/TBA process technology with proximity to low-cost feedstocks, which gives LyondellBasell a competitive advantage in the global marketplace for these products.”
Most of the products would be exported via the Houston Ship Channel. The project would have a split facility design to optimize product balances and synergies between LyondellBasell sites. The proposed plant would be sited at the LyondellBasell Channelview Complex east of Houston. The associated ethers unit, which would convert TBA to oxyfuels, is proposed for the Bayport Complex near Pasadena, in the heart of the region’s petrochemical complex.
The company already has completed front-end engineering design work and received the required environmental permits. Site preparation is underway and construction is expected to begin during the second half of 2018.
The project should completed by mid-2021. Final site selection is contingent upon receiving final approval of certain economic incentives by the state, the company said.
At the peak construction, the project should create up to 2,500 jobs, and once operational, 160 permanent positions.
Greater Houston Partnership CEO Bob Harvey said the new project “further advances Houston’s position as a global hub of petrochemical manufacturing, leveraging Houston’s strategic access to the Americas and top markets around the world.”
PO is used to manufacture bedding, furniture, carpeting, coatings, building materials and adhesives, while the TBA would be converted to two ether-based oxyfuels, methyl tertiary butyl ether (MTBE) and ethyl tertiary butyl ether (ETBE). MTBE and ETBE are high-octane gasoline components that help gasoline fuel burn more efficiently with fewer emissions.
LyondellBasell plans to sell the PO and derivative products to domestic and global customers, while the oxyfuels primarily would be sold into Latin America and Asia. A portion of the TBA would remain in the domestic market in the form of high purity isobutylene, which is used in tires and lubricants.
The PO/TBA project is part of LyondellBasell’s $5 billion organic growth program underway on the Gulf Coast. The company recently completed ethylene expansion projects at its La Porte, Channelview and Corpus Christi sites in Texas, finalizing a multi-year plan to increase annual ethylene capacity in the United States by 2 billion pounds (900,000 metric tons).
Additionally, LyondellBasell began constructing a world-scale polyethylene (PE) plant at its La Porte Complex south of Houston, which uses proprietary Hyperzone PE technology and should more than double that site’s PE capacity to 2 billion pounds/year (900,000 metric tons/year) when it is completed in 2019.
Global upstream sector FIDs are on pace to double from 2016, marking a positive turning point for the long-depressed oil and natural gas markets, according to a recent report by Wood Mackenzie.
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