CPChem receives board approval for planned ethane cracker, PE units

Houston (Platts)--3Oct2013/101 pm EDT/1701 GMT


Chevron Phillips Chemical has received board approval to execute its US Gulf Coast Petrochemical Project, the company said Thursday.

The project, announced in March 2011, includes building two polyethylene units with annual capacity of 500,000 mt and one 1.5 million mt/year ethane cracker.

The company has awarded an engineering, procurement and construction contract to Gulf Coast Partners, a partnership between Zachry Industrial and Technip USA, for the construction of the two polyethylene facilities. The ethane cracker EPC contract was awarded to a joint venture between JGC (USA) and Fluor Enterprises.

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The company announced August 13 it had secured air permits from the Texas Commission on Environmental Quality for the project and a greenhouse gas permit from the US Environmental Protection Agency for for the cracker.

The two polyethylene units will be built at a site in Old Ocean, Texas, near Chevron Phillips Chemical's Sweeny plant, while the ethane cracker will be built at Chevron Phillips Chemical's Cedar Bayou plant in Baytown, Texas.

The projects are expected to be completed by 2017, the company said.

Site preparation is in progress, critical equipment for the project has been ordered, expansion of the supporting infrastructure has commenced and the company has executed a contract for the fabrication of the railcars needed to supply product, it said.

"We are able to realize this important milestone thanks to continued strong growth in demand for our products, shale resource development in the United States, and the tremendous support of our owners," said Pete Cella, president and CEO of Chevron Phillips Chemical. "We remain in the first-mover position as we take another critical step in executing a project that will benefit our customers, suppliers, local communities and existing and future employees."

The company, a partnership between Chevron and Phillips 66, previously estimated the total investment in project at $5 billion.

The polyethylene units will be capable of producing high and linear low density polyethylene products, including bimodal and metallocene-based polyethylene polymers. In addition to the bimodal and linear low density products, the flexibility of these units will allow for growth of current blow molding, injection molding and film grades currently offered by the company.

CPChem expects the project to create about 400 long-term direct jobs and 10,000 engineering and construction jobs.

--Pavel Pavlov, pavel.pavlov@platts.com
--Edited by Jason Lindquist, jason.lindquist@platts.com

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