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New Ethylene Facilities Going into Service in 2019

New Facilities Scheduled to Go Operational as U.S. Ethylene Market Is on the Rise

Both on supply and demand side prospects for the NGLs market look bright. In particular, U.S. production is expected to grow by 15% in 2019. Most of the scheduled capacity will be paired with derivative units so spot prices will not be heavily affected.

Behind the expected output increase stand several key facilities, most of them to be completed in Louisiana.

The Number One hub for these projects is the Lake Charles area.

Indorama Ventures is about to complete its long-awaited 420,000 tonnes/year cracker unit. It will process ethane and propane feedstocks to produce 370,000 tonnes/year of ethylene and 30,000 tonnes/year of propylene. The facility, idled back in in 2001, was acquired in late 2015 from Occidental Chemical (OxyChem). It is currently in commissioning and should go operational early in 2019.

Sasol’s Lake Charles Chemical Complex consisting of seven manufacturing units situated on approximately 400 acres will have tripled the company's chemical production capacity once an ethane cracker with annual capacity of 1.5 million tonnes/year of ethylene will be put to service. Approximately 90 percent of the cracker's ethylene output will be converted into a diverse commodity and high-margin specialty chemicals. The cracker is reaching mechanical completion in December 2018.

Finally, Lake Charles petrochemical project, a JV by Westlake Chemical Corp. and Lotte Chemical USA Corp. (South Korea), will put in service an ethane cracker to produce more than 1 million-tonne/year of ethylene. The Lake Charles ethylene plant is scheduled for startup during first-quarter 2019.

Point Comfort, Texas

Formosa Plastics Corp. USA. is currently building a 1.6 million tonnes/year plant here. It is to begin operation in 2019.

Plaquemine, LA

Shintech Inc., the U.S. subsidiary of Shin-Etsu Chemical Co. Ltd., Tokyo, is building a 500,000 tonnes/year ethylene plant here.

The company had planned to reach mechanical completion by the end of 2018 and to begin start-up during the first quarter. The ethane cracker is part of an expansion planned to support feedstock for the company’s ethylene vinyl chloride (VCM) and polyvinyl chloride (PVC) production.

Information about other U.S. petrochemical facilities including NGL/LPG/HV pipelines can be discovered on Rextag’s U.S. Natural Gas Liquids Infrastructure maps.

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NGLs

NGL Energy Partners Strengthens its Propane Asset Portfolio in the North-East

NGL Energy Develops Its Portfolio of Wholesale Propane Business Assets. Bought From DCP

See how U.S. NG pipeline network length compares to that of other countries.

On June 16 Targa Resources Corp. decided to acquire Lucid Energy Group, located in the Permian Basin, which is a part of Riverstone Holdings LLC and Goldman Sachs Asset Management. Firstly, Targa enlarged due to the recent “blot-on” acquisition of Southcross Energy in the Eagle Ford for $200 million and it will become bigger thanks to the $3.55 billion cash transaction. Targa’s financial position allowed it to utilize convenient opportunities to extend its company so it bought #Lucid using available cash and debt with an estimated pro forma year-end 2022 leverage around 3.5 times. According to Targa’s estimates, the acquisition of Lucid will increase the number of natural gas pipelines by 1,050 miles and add about 1.4 Bcf/d of cryogenic natural gas processing capacity in service or under construction located mainly in Eddy and Lea counties of New Mexico. The investment-grade producers source approximately 70% of current system volumes. According to the press release, a full-year standalone adjusted EBITDA is expected to be between $2.675 billion and $2.775 billion and reported year-end leverage ratio of about 2.7 times. Targa’s updated financial expectations assume NGL composite prices average $1.05 per gallon, crude oil prices average $100/bbl, and Waha natural gas prices average $6 per MMBtu for the remainder of 2022.

Your team’s ESG performance can be greatly improved applying the asset co-location analysis within upstream or midstream use cases. This has been a topic for a discussion at Rextag’s ‘Is ESG Improvement Next Door?’ webinar. We reviewed some cases like curbing gas flaring or renewable energy sourcing to power the fossil fuel infrastructure. Many combinations are available with access to the data Rextag provides on wells, acreages, power lines, substations, and such renewable infrastructure as wind turbines, methane landfills, etc.

BPPlc agreed on June 13 to exit the Canadian oil sands in an asset swap with Cenovus Energy Inc. potentially worth up to CA$1.2 billion. 50% non-operated interest in the #SunriseOilSands project will be sold by BP in an agreement reached with Cenovus Energy, a company based in Alberta. Two companies agreed on the following conditions: total consideration for the transaction includes CA$600 million in cash, additionally, a contingent payment with a maximum aggregate value of CA$600 million expiring after two years, and concerning Cenovus, it will have a 35% position in the undeveloped Bay du Nord project offshore Newfoundland and Labrador. Current production from the Sunrise Oil Sands asset is about 50,000 bbl/d and the company anticipates achieving a nameplate capacity of 60,000 bbls/d through a multi-year development program.

2022 blog posts