Chevron Phillips Chemical Co. Baytown, TX
The army of cranes that can be viewed easily from I-10 in Baytown
will be gone after a few short months as Chevron Phillips Chemical’s $6
billion expansion inches nearer to a close.
The pricy “U.S. Gulf Coast Petrochemicals Project” is over 80 percent
finished. The project is estimated to be operating within a year’s
time. The project consists of constructing a huge ethane cracker on a
plot of land the size of 44 football fields at Chevron’s Cedar Bayou
plant located in Baytown. The cracker will convert natural gas into
ethylene at the rate of 1.5 million metric tons each year. Ethylene is
the most commonly used building block in the production of plastics.
In
addition to the petrochemicals project, Chevron will also build two
brand new polyethylene plastics facilities just southwest of Houston in
Old Ocean. The facilities, located near Phillips 66’s Sweeny complex,
will take converted ethylene to create plastic resin that will be
domestically and internationally shipped.
Ron Corn, Chevron’s senior VP of projects and supply chain, said that
the idea for project started in 2010 following the company’s shift in
focus to their growing presence in the Middle East. Chevron had massive
projects in both Qatar and Saudi Arabia.
“It was quite radical at the time,” said Corn of constructing major
petrochemical projects on Texas soil, “These are big, big projects —
very complex.”
The endeavor is an attempt to continue the petrochemical boom along
the Gulf Coast and to cash in on the abundant, inexpensive ethane
created from natural gas through the current shale revolution.
The American Chemistry Council, an industry trade group, predicts
that over 250 petrochemical projects are either currently under
construction or planned all over the nation through 2023 and that the
projects will produce around 70,000 new jobs. The total cost is nearly
$160 billion with $50 billion of that cost in Texas alone.
The mounting demand for plastics is coming primarily from Asia,
particularly China. However, India and Indonesia account for some of the
demand as well. “They’re basically entering the consumer class,” said
Corn of these countries which are pushing for products such as
single-serve packets of shampoo for the very first time.
Other crackers that are being built in Texas and Louisiana have
become competitors for Chevron and their new project. The Chevron
Phillips cracker has eight huge furnaces that heat the ethane until it
becomes ethylene. So far, the project has produced 10,000 temporary
construction jobs in Baytown and Old Ocean and will produce 400
permanent position when it is finished.
Exxon Mobil is another company building a cracker in Baytown that
will also hold a capacity of 1.5 million metric tons. The company’s new
plastics plants are being constructed in Mont Belvieu. Exxon is also in
the middle of selecting a site in either Texas or Louisiana to make the
world’s largest cracker in a joint deal with the Saudi Arabia Basic
Industries Corp or SABIC.
Corn stated that he is sure that the demand for global plastics is
growing rapidly enough to consume the imminent explosion in supply. “The
spotlight is on the U.S., and the world needs the U.S. production,” he
said.
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