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CP Chem to export majority of HDPE output from $8.5bn Texas cracker project – CEO

DOWNSTREAM CENTRAL ASIA AND CASPIAN

CP Chem to export majority of HDPE output from $8.5bn Texas cracker project – CEO

Chevron Phillips Chemical (CP Chem) plans to export the majority of its high density polyethylene (HDPE) production from its new Texas joint venture cracker project to key markets in Asia, Europe and Latin America, its CEO said. - ICIS

It will primarily be exported to Asia, Europe and Latin America. Right now, we plan for all of it to go into supporting our global marketing of Marlex [HDPE] and the majority of that will be exported.

Bruce Chinn, president and CEO of Chevron Phillips Chemical

CP Chem and QatarEnergy, through their 51/49 joint venture Golden Triangle Polymers, announced on 16 November a final investment decision (FID) to build an $8.5bn integrated cracker complex in Orange, Texas with capacities of 2.08m tonnes/year of ethylene and 2m tonnes/year of HDPE under CP Chem’s Marlex brand.

Construction is already under way and the project is scheduled for start-up in 2026. The HDPE will be produced with CP Chem’s MarTECH loop slurry process which is used in both single loop and advanced dual loop designs.

Our investment decision is driven by long-term views on demand and access to reliable, affordable feedstock. We believe the current environment will improve, and this is just a great time for us to invest for the longer term. The long-term fundamentals look strong and it’s an attractive project in our core business that allows us to meet growing global demand. It also allows us to leverage a favourable engineering, procurement and construction (EPC) market and really attract the best contractors, vendors and labour.

Bruce Chinn, president and CEO of Chevron Phillips Chemical

The Golden Triangle Polymers project is the only cracker project announced in the US thus far, as the last wave of capacity expansions start up in late 2022 and early 2023.

LOWER CARBON EMISSIONS

The project is expected to have around 25% lower greenhouse gas (GHG) emissions than similar facilities in the US and Europe, according to CP Chem.

The facility is designed using modern emissions reduction technology and processes, including using hydrogen fuel recycling for the ethylene furnaces to reduce emissions, and an advanced ethane refrigeration system which creates less emissions than typical units in the US and Europe.

Bruce Chinn, president and CEO of Chevron Phillips Chemical

CP Chem has no plans to employ carbon capture and storage (CCS) to further reduce emissions but is open to CCS and other opportunities to reduce emissions in the future, he added.

PE OUTLOOK

The market outlook for PE is certainly challenged in the near term with new supply and global economies either in, or on the cusp of recession. However, the CP Chem CEO is confident on prospects for robust long-term demand growth.

We think demand for our products are still growing but unable to immediately absorb the supply that’s coming online. We expect margins to be challenged in the short term as industry absorbs new PE capacity. But despite the current challenges and those that we see into 2023, the long-term fundamentals of this business really do remain strong. As the world’s population grows and the middle class expands, this facility will help meet growing demand.

Bruce Chinn, president and CEO of Chevron Phillips Chemical

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