New PGP pipelines planned; US oil product exports surge; Mexico market to hit $1.6 bn

A selection of news from the last month.

Ineos's Grangemouth facility is scheduled to start receiving ethane from the US in 2016. Image credit: Ineos Group

New US pipelines to boost PGP capacity
Houston-based Enterprise Products Partners has announced several projects to increase pipeline capacity for polymer-grade propylene (PGP) between 2017 and 2020. 

Enterprise will convert and expand the 149-mile North Dean pipeline from refinery-grade propylene (RGP) service to PGP service. Scheduled for completion in January 2017, the converted pipeline will serve petrochemical facilities as far south as Seadrift, Texas in Calhoun County.

The company will also convert the 263-mile, bi-directional Lou-Tex pipeline from chemical-grade propylene service to polymer-grade, scheduled for 2020. Enterprise will also build a 65-mile, 10-inch diameter pipeline, which will transport RGP between Sorrento and Breaux Bridge, Louisiana, starting in 2017.

The pipeline capacity will be matched by the start-up of several new on-purpose propylene plants on the Texas Gulf Coast, including Dow Chemical’s 750,000 mtpa propane dehydrogenation (PDH) unit at Freeport, scheduled to come on stream in Q3 of 2015; Enterprise’s 750,000 mtpa PDH unit, slated to start in September 2016; Ascend and Formosa Plastics’ PDH units, scheduled for 2019; and BASF’s planned methanol-to-propylene plant at Freeport, expected to begin operations in 2019.

US net oil product exports rise further
US refinery output of petroleum products has grown significantly in the past 10 years while consumption has declined, resulting in a major increase in product exports, according to the US Energy Information Administration (EIA).

Petroleum product exports averaged 4.1 million barrels per day (b/d) in the first four months of 2015, up by 0.5 million b/d compared with the same time in 2014. Product imports are also higher than last year, but by a smaller margin, leading to an increase in net petroleum product exports.

According to the EIA, the future of net exports will hinge on trends in both output and consumption of petroleum products. Future output will reflect both US refinery runs and the production of hydrocarbon gas liquids outside of refineries.  Future domestic consumption will reflect prices, and economic activity and policies, such as fuel economy standards for both light- and heavy-duty vehicles.

Industrial gas demand surge to continue in 2016

New industrial facilities, including methanol plants and ammonia or urea-based fertilizer plants, will increase the already-growing industrial natural gas use in the US in the short term, reversing a decline that lasted more than a decade, according to the US Energy Information Administration (EIA).

Annual US industrial natural gas consumption is expected to rise to an average 21.7 billion cubic feet a day (Bcf/d) in 2015, up by 3.4% compared with 2014 when it was 21 Bcf/d. 
Industrial gas use is projected to rise another 3.9% in 2016, to an average of 22.5 Bcf/d as more plants come on stream.

 Source: US Energy Information Administration.

Mexican petchems market to hit $1.6 bn by 2020
The petrochemical market in Mexico could reach $1.6 billion in 2020, according to a new report by Frost & Sullivan.

The study projects that between 2014 and 2020, the polybutylene terephthalate (PBT) and styrene-butadiene-styrene (SBS) markets in Mexico will grow at compound annual growth rates of 11.3% and 8.7%, respectively.

The growth will be primarily driven by investments in the automotive, electronics and appliance segments in the country.

Skilled labor gap hits productivity
Skilled labor supply/demand imbalances are creating an alarming number of weld failures in industrial construction in Texas, Louisiana, Oklahoma, Mississippi, Alabama and Florida, according to a recent skilled labor productivity survey by Construction Industry Resources (CLMA) and the Construction Users Roundtable (CURT).

While a sizeable number of respondents report low or no weld issues due to lower productivity, 18% of the survey participants are seeing fail rates higher than 8%.

Moreover, the majority of the respondents believe that pipefitters/combo welders are experiencing the largest decrease in labor productivity among mechanical trades (18% of the total), followed by specialty welders (12%), structural ironworkers/welders (7%) and millwrights (5%).

Of the 202 survey participants, 36% were facility owners while 64% were construction contractors, primarily operating in the chemical & refining, power, manufacturing and commercial sectors in the US Southeast.

Ineos to ship liquefied US ethane to Europe
Two gas tankers built by the Sinopacific Offshore and Engineering company were named on July 14 in China and will soon be shipping US shale gas feedstock to Europe.

The JS INEOS Insight and JS INEOS Ingenuity ships will join an eventual fleet of eight tankers operated by Swiss-based petrochemical manufacturer Ineos that will carry 800,000 tons of shale gas a year from the US to the company’s cracker complexes Rafnes in Norway and Grangemouth in Scotland.