CP Chem and Qatar Petroleum to build USGC petrochemical project
Chevron Phillips Chemical (CP Chem) and Qatar Petroleum today announced that they have signed an agreement to jointly pursue the development of a new petrochemical complex on the US Gulf Coast.
CP Chem would be the majority owner with a 51% share, and Qatar Petroleum would own the remaining 49% of the project.
John Maselli, senior research analyst at Wood Mackenzie, said: “Chevron Phillips Chem and Qatar Petroleum’s announcement of a cracker on the US Gulf Coast continues a long history of joint ventures between the two companies. The duo also recently announced a similarly-sized project to be built in Qatar.
“However, this would be the first project located in the United States. The proposed US project is part of a trend of Middle Eastern oil companies looking to diversify across regions and expand their footprint in the growing chemicals industry.
“Likewise, the Qatar project provides CP Chem an opportunity to further diversify assets internationally, while still maintaining advantaged production economics based on ethane.
“Ethylene production from ethane has grown almost 70% globally since 2010, as ethane production skyrockets from the continuing US shale gas revolution.
“The ethylene from these projects will be utilised to produce high-density polyethylene (HDPE). HDPE is a natural choice for CP Chem as they are already North America's largest producer of HDPE and hold their own technology to produce HDPE via a slurry loop process.
“The CP Chem/QP and Ineos announcements indicate that producers are interested in capitalising on this strong growth by increasing production in feedstock-advantaged regions.
“The US Gulf Coast is seeing a large amount of ethane production growth due to the continuing shale gas revolution, while Qatar is seeing incremental ethane production growth coinciding with growth in natural gas production slated for LNG.”