Transit bottlenecks could hurt plastics growth

MOSCOW (MRC) -- The shale-gas fueled expansion of the North American plastics industry could be hurt by capacity problems in the U.S. transportation system, including within ports, rails and roads, according to a new report from the American Chemistry Council, as per Plasticsnews.

The March 1 report said plastics could be among the most impacted sectors. It notes that polyolefin capacity is projected to grow by 68 percent through 2021, and that a lot of that investment will be in places like the Gulf Coast, where transit networks are already congested.

"The U.S. business of chemistry is growing like never before, but limitations across all modes of transportation are getting in the way of fully realizing this American manufacturing success story," said Cal Dooley, president and CEO of Washington-based ACC.

At a March 1 briefing in Washington, Dooley, lobbyists for the trucking industry and Rep. Garret Graves (R-La.) said they welcomed plans by the Trump administration and others in Washington to spend USD1 trillion on new infrastructure.

"We’re very encouraged that President Trump did talk about the need for a major infrastructure funding bill," Dooley said. "What we’re trying to do here with this study is help people connect the dots."

The report, which surveyed 68 chemical manufacturers, reported significant worries in the industry about whether the Gulf Coast will be able to handle big increases in plastics shipments, particularly for export.

“The Gulf ports will be attractive for new exports, particularly for the polymer production coming online in that region,” the report said. "However, significant concerns persist over whether infrastructure in and around these ports (particularly in Houston), can support added volume."

Dooley said half of the investment in manufacturing last year came in the chemical industry.

According to the report, since 2010, 264 projects worth an estimated USD161 billion have been announced in the chemical industry, which will create an estimated 426,000 new jobs.

Beyond polyolefins, that new investment includes a 43 percent increase in production capacity in other plastics by 2021.


Exxon to invest USD20 B on US Gulf Coast refining projects

MOSCOW (MRC) -- ExxonMobil Corp, the world's largest publicly traded oil producer, said it would invest USD20 billion through 2022 to expand its chemical and oil refining plants on the US Gulf Coast, reported Reuters.

The investments at 11 sites should create 35,000 temporary construction jobs and 12,000 permanent jobs, Chief Executive Darren Woods said in a speech at CERAWeek, the world's largest gathering of energy executives.

Some of the expansions began in 2013, but the scope of the project is now growing and the timeline extended, Exxon said.

Woods ran Exxon's refining division before becoming CEO two months ago, and the new spending benefits a sector with which he has significant experience and comfort. Investments in the high-margin projects should help ease concerns from Wall Street that Exxon's growth potential - especially in oil and gas exploration and production -- is sliding.

"ExxonMobil is building a manufacturing powerhouse along the US Gulf Coast," Woods said. "These businesses are leveraging the shale revolution to manufacture cleaner fuels and more energy-efficient plastics."

The investments across Texas and Louisiana will take advantage of cheap shale gas to make plastics and other chemicals for export. The strategy builds on prior steps Exxon and peers, including Dow Chemical Co, have taken in the wake of the American shale expansion, which sharply cut production costs.

"The supply is here. The demand is there. We want to keep connecting those dots," Woods said.

Exxon last month pledged to boost this year's spending by 16 percent to expand operations, especially in shale production, after the company posted a better-than-expected quarterly profit, helped by rising oil prices and lower costs.

The bulk of the expansion will take place in Beaumont, Texas, with plans to expand polyethylene production, oil refining capacity and liquefied natural gas exports.

Exxon also will increase its lubricant manufacturing capacity and potentially build a new refinery to produce ethane, a key building block for chemical production.

As MRC informed before, in December 2016, Mitsubishi Heavy Industries, Ltd. (MHI) received an order for supply of systems to support a large-scale polyethylene production train for ExxonMobil's Beaumont Polyethylene plant. The new production train is slated to be completed in 2019, and will produce 650,000 tons of polyethylene per year. MHI is currently building a Polyethylene plant comprising of 2 units, each with the same scale of production capacity, at ExxonMobil's Mont Belvieu, Texas facility, making this the third order following the completion in 2011 of a polyethylene plant in Singapore.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.

Borealis mulls new PP plant, steam cracker at Borouge

MOSCOW (MRC) -- Austrian chemical company Borealis is carrying out feasibility studies for a polypropylene (PP) unit and a mixed-feed steam cracker at Borouge, the petrochemicals complex it owns jointly with Abu Dhabi's state-owned Adnoc in Ruwais, UAE, said Polymerstrade.

The study for the new PP unit- known as PP5, is in its latter stages, with a final investment decision expected later this year. The new plant would have a production capacity of around 600,000 tpa. Abu Dhabi refiner Takreer is building a new 500,000 tpa propane dehydrogenation (PDH) unit at Ruwais that is planned to start up in the third quarter of this year. This will create a significant excess of propylene in the complex that would easily support a new PP plant, Borealis chief executive Mark Garrett said.

The design challenges of building a new PP unit at Ruwais are quite minimal, Garrett said, as Borealis can effectively copy the design of its four existing PP units at Borouge. Borealis is also evaluating the feasibility of building a mixed-feed steam cracker at Borouge, a project known as Borouge 4. With Borouge's existing cracker capacity ethane based, Garrett said mixed-feed cracking is a "new challenge" for the complex. The decision to evaluate mixed-feed cracking was taken because there is no longer enough price-advantaged ethane available in the Middle East to support a world-scale ethane cracker.

The feasibility study is focusing on guaranteeing the correct balance of naphtha and lighter feedstocks will be available, and evaluating possible downstream units to consume the heavier co-products, such as C4s, that result from cracking heavier feedstocks. While the Abu Dhabi petrochemical industry has a lot of experience in ethylene and propylene, it has no prior experience in C4 chemistry, Garrett said. "We do not have a decision what we would do with the C4s at this stage", he said. A definitive timeline is not yet in place because of the complexity of the project, although the study is expected to take 12-18 months to complete.

As MRC informed earlier, Honeywell has announced that Borealis AG selected Honeywell UOP's process technology for a proposed plant in Kallo, Belgium, that converts propane into propylene, a primary ingredient for making plastics.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.

Amec awarded Shell global downstream framework agreement

MOSCOW (MRC) -- Amec Foster Wheeler announced the award of a five-year global Enterprise Framework Agreement (EFA) with Shell Global Solutions International, B.V. to provide engineering, procurement and construction management (EPCM) services for its downstream projects worldwide, as per Hydrocarbonprocessing.

The award marks significant progress in our global engineering consultancy's strategy to build our EPCM business, and to deploy the capability globally.

For any agreements resulting from the EFA, Amec Foster Wheeler will provide concept, front end engineering, detailed design, procurement, and project and construction management services for refinery, chemical and upgrades projects.

"We are excited to collaborate with Shell. Our innovative solutions in project design, delivery and management make us the top choice among our clients," said John Pearson, Amec Foster Wheeler's President, Oil, Gas & Chemicals.

Amec Foster Wheeler's proven 'More 4 Less' lean engineering methodology will play an important role in the global framework. Efficiencies from 'More 4 Less' have delivered Amec Foster Wheeler's customers savings of up to 60% in time and cost, compared to traditional approaches.

The EFA will run until 2022.

As MRC informed before, in May 2016, Indonesia’s PT Pertamina (Persoro) and Saudi Aramco let a contract to a subsidiary of Amec Foster Wheeler PLC to provide engineering and project management services for the upgrade and expansion of the 348,000-b/d Cilacap refinery on Java, Indonesia.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.

Avangard to invest USD10 million in LDPE film recycling plant

MOSCOW (MRC) -- Plastics recycler Avangard Innovative LP is spending USD10 million on a new low density polyethylene film recycling plant, said Plasticsnews.

The Houston-based company already manages 100 million pounds of recycled PE film each year collected from retailers and other generators of film waste. But this move vertically integrates the company to also create post-consumer resin from that feedstock.

Avangard expects the new 35,000-square-foot plant, located at the company’s existing facility in Houston, will create 30 jobs.

"Work will begin tentatively on or before June 1," said Mark Patin, general plant manager for Avangard. Initial production is slated for August, and full production is expected in October at the site, which will have a total annual capacity of 48 million pounds.

"Before we would collect it from different sources and we would trade it, sell it on the open market. And now we’re going to take the material that we were trading, and instead of selling, we’re going to create a recyclable LDPE pellet out of it," he said.

"It completes a cycle of a waste stream. We have access to materials that we were trading, and now we can create a pellet and serve as another product," Patin said.

Avangard’s big investment in plastics recycling comes at a time when some others are having difficulty and even going out of business because of lower commodity prices.

Creating post-consumer resin for film applications from recycled film closes the loop and meets what the company said is a growing demand in that market.

The company said research has determined specific recycling streams that will best produce post-consumer resin to "meet the critical properties needed for film applications."

The new multimillion-dollar facility, Avangard said, will be “one of the first plants to utilize optical sorting to prepare the film blend for extrusion."

Avangard is the 14th largest plastics recycler in North America, measured by volume, according to Plastics News’ most recent ranking.