CPChem, Qatar to build new polyethylene plant in Texas-Louisiana border

Chevron Phillips Chemical and QatarEnergy announced on Nov. 16, 2022 plans to build an $8.5-billion ethylene and polyethylene integrated complex on the Texas side of the Sabine River at the Louisiana border, with CPChem owning 51% of the venture and startup for 2026.

A view of Port Arthur on the Sabine Lake near CPChem´s site in Orange, Texas along the Sabine River. Image courtesy of David Mark.

Some 4,500 people will work during construction and then about 500 full-time positions will remain permanently to run the Orange, Texas integrated plants.

That should generate significant residual economic impacts for the community, CPChem said.

Plant to be operational by 2026

“This important project will complement QatarEnergy’s growing portfolio, both internationally as well as in the U.S., and will help meet growing global demand for polymers,” said the CEO of QatarEnergy, Saad Sherida Al-Kaabi.

The plant will include a 2,080 KTA (thousand-tonnes-year) ethane cracker and two 1,000 KTA high-density polyethylene units, according to the press release. 

The U.S. Gulf Coast is cost competitive relative to many parts in the world like Asia as it relies on ethane fractioned from gas in shale deposits. Some other parts on the world must rely on coal or naphtha, derived from crude oil, for their ethylene production. 

The project is targeting 25% lower greenhouse gas emissions compared with similar facilities in the U.S. and Europe, according to the release.

Construction of the Golden Triangle Polymers plant will begin immediately near CPChem´s existing facilities in Orange, Texas, 110 miles east of Houston, the statement said.

The engineering, procurement and construction of the polyethylene units will be executed through a joint venture between the Zachry Group and DL USA.  The project also includes a rail and storage yard. 

The U.S. polyethylene market

“Polyethylene is used in the production of durable goods like pipe for natural gas and water delivery and recreational products such as kayaks and coolers,” according to the statement.

It is also used in essential packaging applications to protect and preserve food, helping prevent it from going to landfills, and to keep medical supplies sterile.  

The project was announced as polyethylene prices in North America have seen a sharp contraction in 2022 that in part resulted from the completion of projects in recent years that have added significant output capacity, including about four million tonnes of new capacity just this year.

“Chevron Phillips Chemical and QatarEnergy have collaborated for over 20 years on the assets we operate together in Qatar. We have a great relationship and a proven track record of operating these facilities safely and reliably,” said Chevron Phillips Chemical President and CEO Bruce Chinn.

2019 announcement, 2020 deferral

The company had deferred the project in 2020 amid restrictions to contain the spread of Covid.

Back in July 9, 2019, CPChem had announced that in partnership with Qatar Petroleum it would build what at the time called the “U.S. Gulf Coast II Petrochemical Project.”

The project was described back in 2019 as a 2,000 tonnes per year ethane cracker with two adjacent 1,000 tonnes-per-year, high-density polyethylene capacity plants. The project, as announced in 2019, was estimated at about $8 billion.

Qatar had a GDP per capita of over $ 60,000 in 2021, one of the world´s highest. The country is also the world´s leading per-capita emitter of carbon dioxide. Qatar is one of the world´s leading LNG exporters.

Other CPChem work in Texas plants in 2022

On March 9, 2022 the U.S. Department of Justice informed that Chevron Phillips Chemical Company LP “agreed to make upgrades and perform compliance measures estimated to cost $118 million to resolve allegations that it violated the Clean Air Act and state air pollution control laws at three petrochemical manufacturing facilities located in Cedar Bayou, Port Arthur, and Sweeney, Texas.”

The settlement required the installation of “pollution control and emissions monitoring equipment at three facilities in Texas, reducing emissions of greenhouse gases and other harmful gases by thousands of tons per year,” said at the time Larry Starfield, with the EPA, according to the statement.

“Those controls, plus a requirement for fence line monitoring of benzene emissions and corrective actions when benzene readings are high, will result in significant benefits for the local communities in Texas,” he added.

Pollution controls reduce emissions of “climate-change-causing greenhouse gases, including carbon dioxide, methane and ethane, by over 75,000 tons per year. The settlement is also expected to reduce emissions of ozone-forming VOCs by 1,528 tons per year and of toxic air pollutants, including benzene, by 158 tons per year,” it said.

Flares are “devices used to combust waste gases that would otherwise be released into the atmosphere during certain industrial operations,” the DOJ explained at the time.

The agreement “requires the company to minimize the amount of waste gas that is sent to the flares, which reduces the amount of flaring. Second, the company must improve the combustion efficiency of its flares (…),” the DOJ added at the time. 

CPChem announced in May 2021 plans for the construction of a 1-hexene plant in South Texas. At the time it was reconsidering the joint venture investment for the ethylene-polyethylene complex based on market conditions.

By Renzo Pipoli