Chevron Phillips Chemical Co. has started up two polyethylene units, helping to meet increased global demand and supporting our company’s growth strategy.
The start-up of the two polyethylene units of Chevron Phillips Chemical Co. (CPChem)’s U.S. Gulf Coast Petrochemical project in Old Ocean, Texas, marks an important milestone for our joint-venture company and a major investment in Chevron’s growth strategy. With each polyethylene unit slated to produce at least 500,000 metric tons of product annually, the project will enable CPChem to deliver resins on a global scale to the company’s expanding customer base.
At a dedication ceremony held at the facility on Nov. 10, Downstream & Chemicals Executive Vice President Pierre Breber affirmed the importance of this major capital project to our company, especially at a time when the petrochemicals market is a strategic growth area, which helps to diversify our company’s portfolio.
"CPChem is a critical part of Chevron’s investment strategy, and this Gulf Coast expansion project is an important piece of the U.S. value chain that has been revolutionized by shale resources. The two new polyethylene units enable CPChem to meet the demand for a wide variety of valuable products. Today’s milestone is a testament to the hard work of the entire CPChem organization."
Executive Vice President , Downstream & Chemicals
The new units allow CPChem to utilize the abundant natural gas liquid feedstocks provided by the development of shale resources from Chevron’s Mid-Continent business unit. These feedstocks will help meet the growing demand for polyethylene from global customers for performing films, high-pressure pipe and packaging.
The dedication ceremony included over 200 guests, including government leaders, customers, and the press.
Speaking at the ceremony, CPChem President and CEO Mark Lashier said, “When we made the announcement that we were going to invest $6 billion to build a new petrochemical asset here on the gulf coast, we literally shocked the world. We were the first to realize that the shale gas revolution had turned the industry upside down. And we capitalized on that by announcing a new cracker and pair of PE units that would be built to take advantage of this previously unknown feedstocks.”
Lashier added, “These world-scale PE units are changing our view on how vast our market reach is. They’re changing our view on how many customers we can serve. And frankly, they’re changing our view of what this company can do. This was a mega project on the scale of something we’ve never done before.”
And, he concluded, “I’m particularly glad to say that we made a commitment back in 2011 to bring these units on-line in 2017 and we started producing within two to three months of our original target.”
Ethylene feedstock for the new units will be supplied via the company’s ethylene pipeline and storage system that was also expanded as part of this project. Chevron Pipe Line Co. (CPL) laid the main ethylene feedline for the polyethylene units. They were also a key partner in the commissioning of the ethylene feedline and a nitrogen pipeline. CPL also created new metering facilities, allowing the company to remotely operate both pipelines via their control center. These efforts resulted in a safe and successful commissioning and operation of both pipelines.
Along with the polyethylene units, the company purchased nearly 3,000 rail cars and constructed a state-of-the-art rail facility with the capacity to store 1,500 rail cars to ship polyethylene pellets to customers around the world.
The final element of the company’s $6 billion U.S. Gulf Coast Petrochemicals Project entails the construction of a new ethane cracker in Baytown, Texas, that is expected to begin production in the first half of 2018. Once this facility is online, CPChem’s North America ethylene and polyethylene capacity will increase by 40 percent.
At peak construction, the U.S. Gulf Coast Petrochemicals Project employed approximately 10,000 contractors devoted to completing the polyethylene units and the new world scale ethane cracker.
Chevron and our joint venture partner Phillips 66 are also proud that the project will lead to 400 permanent jobs and provide additional economic opportunities for companies in the region.
Published: December 2017