Paris-based Total considers a proposed $2 billion steam cracker in Port Arthur that would produce ethylene a top priority for its refining and petrochemicals business. The cracker would produce up to 2.2 million pounds of ethylene a year. Ethylene is the primary building block of most plastics.
A final decision to green-light the project is expected in the third quarter of the year, said Philippe Sauquet, Total’s president of refining and chemicals in an interview at the IHS Energy CERAWeek conference. The project could be completed in 2019.
Total is still seeking an investment partner on the project, possibly for up to 50 percent, Sauquet said, but the company has prospects lined up. He declined to provide further details.
Total already has petrochemical production at its Port Arthur complex with the refinery. However, the existing chemical plant is a joint venture with BASF. The proposed cracker would be separate from the joint venture, but on the same complex.
While Sauquet sees Total’s refining business as competitive, he said he is more bullish on petrochemicals for now. Total also is considering expansions at its existing petrochemicals plants in Qatar and Saudi Arabia.
Phillips 66’s joint venture, Chevron Phillips Chemical, is in the middle of a $6 billion expansion in Baytown at its Cedar Bayou plant east of Houston. The joint venture has said additional expansion could follow.
Apart from chemicals, Phillips 66 has grown its pipeline and terminals business. While the midstream space is currently “taking a pause” because of weak oil and gas prices, Garland said, the sector is bound to rebound. He hinted that Phillips 66 could be a potential buyer of any such assets that hit the market.
BP, for instance, sees petrochemical demand growing by 2 percent annually, compared to 1 percent for transportation fuels, Tufan Erginbilgic, chief executive of BP’s global downstream business, said on the same panel. That’s not because people are driving less, but because vehicles are rapidly becoming more fuel efficient each year, he said.
Even with vehicles needing less fuel, Garland said the demand is still there. After all, the world population will grow from 7 billion to 10 billion in 20 years, he said.
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