CPChem works on technology to feed waste plastic pyrolysis oil to crackers
CPChem, which is still evaluating whether conditions are adequate to resume an ethylene and polyethylene project in the U.S. Gulf Coast, is also working on technological developments that could eventually use pyrolysis oil from waste plastic as feedstock for the company’s cracking.
“The proprietary technology we developed fundamentally depends on bringing pyrolysis oil from waste plastic into the front end of our crackers,” said CPChem’s CEO Bruce Chinn in a July 13 video interview posted on the company’s website, according to an email received July 20 from the company spokesman.
“We’re proving it out and we are also working to establish supply chains. We’ve signed up three supply deals with pyrolysis oil suppliers and hopefully we would do more of that,” added Chinn, who became CEO earlier this year.
CPChem has yet to announce a FID on a cracker and HDPE polyethylene project following deferment during the Covid-19 lockdowns. It still mulls whether to retake that initiative announced in 2019 but then deferred in 2020.
“We were able to restart safely after the 2020 hurricanes and February’s winter freeze and we are working hard to really help our customer rebuild their inventories amid the demand that is fueled by the world economy reopening,” he said.
While demand is strong, the company is still reconsidering whether to proceed with a joint venture along with its long-standing partner Qatar Petroleum to build an ethane cracker and polyethylene capacity in the first such project of the two partners in the U.S. Gulf Coast.
“We deferred a final investment decision after completing the front end engineering design phase and we are revisiting market conditions and our project fundamentals in light of global economic disruptions due to the pandemic. We are closely monitoring developments and really moderating the timing to preserve project optionality,” he said.
“It’s too early to predict when those fundamentals will support the kind of positive financial investment decision. I remain positive about the project. We are working closely with our owners, Qatar Petroleum and other project stakeholders.” CP Chem is a venture of Chevron Corp. and Phillips 66.
CPChem has another venture with Qatar Petroleum in the Middle East “and that project continues as planned.” CP Chem has also recently announced construction of a 1-hexene plant in the U.S.
“We are also pursuing other opportunities as we see the economics make sense by really advancing the potential of our current assets through de-bottlenecking,” Chinn added.
e-cracker still a decade away
“We’re not the only one that is working on this but we’re probably 7 to 10 years away,” he said.
“It’s going to take some developments. We need to see some illustrations certainly in brownfield locations to be able to retrofit crackers to do that,” he said.
In addition, there has to be technology advances. There has “got to be continued improvements in the electricity grid and we are counting on technology improvements to do that as we go forward,” he added.
Digitalization can help petrochemical companies bring advances and find the better technologies, he said.
CPChem has “a pretty solid roadmap that prioritizes our digital projects to really help us improve safety operate reliably and make better decisions,” Chinn added.
U.S.-China trade risk
“Right now we are seeing volume very strong as economies reopen post pandemic and we at CPChem are hopeful that we see progress on U.S.-China trade risk,” he said.
“We are an industry that sees the growth of the middle class in Asia as a fundamental driver and having flexible global supply chains really aids us in mitigating trade dislocation,” he added.
“In Asia and other parts we see this trend of a growing middle class which is a fundamental support for growth in our business long term and we got to have the resilience and enterprise to be available and contribute our products,” he said.
Net zero goal elusive
Unlike companies like BASF and Shell that have made public plans of achieving a net zero carbon goal by 2050, CPChem does not plan to set a net zero goal at this time.
“We are not quite there yet,” he said.
“We believe moving in that direction is the right place to be. But with the current solution set that is out there, not only for CPChem but for others, it is a really expensive proposition.”
“What we want to do is be a part of understanding what it takes making sure we are innovating to try to bring that closer but net zero is an aspiration that we should all have as we move forward which is kind of a lot of work to do to get there,” he added.
By Renzo Pipoli