Chemical

There’s hardly a place in the world more attractive today to petrochemical investment dollars than North America, an IHS Chemical executive said Tuesday.

Continuing its strategy to take advantage of cheap U.S. natural gas and natural gas liquids, The Dow Chemical Co. plans to build several specialty material production units for its performance plastics franchise on the U.S. Gulf Coast, the company said last week. The plan further connects Dow’s U.S. manufacturing operations with cost-advantaged feedstocks available from shale gas.

LyondellBasell Industries, a worldwide chemical company based in the Netherlands, said it hopes to join other manufacturers in taking advantage of the abundance of natural gas and natural gas liquids (NGL) produced from shale formations as it begins construction this month on the first of several projects to expand ethylene capacity in the United States by about 20%.

Continuing its strategy to take advantage of cheap U.S. natural gas and natural gas liquids, The Dow Chemical Co. plans to build several specialty material production units for its performance plastics franchise on the U.S. Gulf Coast, the company said Monday.

East Tennessee Natural Gas (ETNG) pipeline has executed agreements with Eastman Chemical Co. to provide an additional 86 MMcf/d of firm gas transportation capacity for 25 years to Eastman’s Kingsport, TN, facility. The projects have a combined capital cost of about $120 million and include modifying existing ETNG facilities and building a new 6.4-mile pipeline extension. Coupled with Eastman’s current contracts, ETNG will provide 121 MMcf/d of firm capacity to the Kingsport facility when the projects are completed. The first project, for service of 25 MMcf/d, is expected to begin in November. The Kingsport Expansion Project, to provide 61 MMcf/d, is expected to be in service during the first quarter of 2015. The projects are subject to board and regulatory approvals. ETNG is a unit of Spectra Energy Corp. and Spectra Energy Partners LP.

Westlake Chemical Corp.’s previously announced expansion of the Petro 2 ethylene unit at its complex in Lake Charles, LA, has begun. This expansion will be completed in conjunction with a planned maintenance turnaround and will increase ethane-based ethylene capacity by 230-240 million pounds annually in support of the company’s ethylene integration strategy. The unit is expected to be down approximately 60 days for the work to be completed.

Dow Chemical Co. began producing on-spec ethylene in late December at its St. Charles Olefins 2 Plant near Hahnville, LA, the company said. “The start-up of our St. Charles ethylene plant represents the first major milestone within our U.S. Gulf Coast investment strategy,” said Brian Ames, president, of Dow’s olefins, aromatics and alternatives business. “This action further reduces the company’s purchased ethylene, lowering costs and strengthening the competitiveness of our high-margin, high-growth derivatives businesses.” Restart of the plant had been previously announced and is part of the company’s plan to further connect its U.S. operations with cost-advantaged feedstocks from U.S. shale gas (see Shale Daily, Dec. 13, 2012). “Plans to increase ethylene and propylene supply and ethane cracking capabilities at existing U.S. Gulf Coast facilities strengthen the competitiveness of Dow’s performance plastics, performance products and advanced materials businesses and enable profitable growth in the Americas,” the company said. The St. Charles plant was idled in January 2009 and is now expected to deliver a $150 million increase in earnings before interest, taxes, depreciation and amortization this year.

Shell Chemical LP is offering to pay western Pennsylvania localities millions for lost tax revenue affected by its proposed “world-scale” ethane cracker. The Beaver County Commissioners said the Royal Dutch Shell plc subsidiary had made an initial proposal to pay localities 110% of the annual property tax revenue currently being paid by Horsehead Holding Corp., which owns the proposed cracker site. State law caps payments-in-lieu-of-taxes at 110%. County tax records show Horsehead, a zinc producer, was assessed around $6.2 million for the 2013 tax year. At 110%, Shell’s offer could amount to an annual payment of about $6.82 million over 22 years, but the county said negotiations are needed. Local stakeholders are preparing to file an application to the state Department of Community and Economic Development for a Keystone Opportunity Expansion Zone for the ethane cracker site. Such a designation would, if approved, give Shell up to 22 years of tax exceptions and abatements.

Enterprise Products Partners LP plans to build one of the world’s largest propane dehydrogenation (PDH) units on the Texas Gulf Coast to take advantage of abundant supplies of propane thrown off by shale gas plays and to address periodic shortages of propylene in the region.