Petchems a bright spot in an otherwise arduous earnings season
Friday August 5, 2016
Petrochemicals are offering growth as energy companies struggle with lingering low crude prices, though some face project delays and others are proceeding with caution, the latest quarterly earnings season shows.
Here’s a roundup of some of the highlights from the most recent round of earnings reports and calls.
Exxon Mobil Corp and longtime partner Sabic last week announced they may build a 1.8 million mt/year ethylene plant in Texas or Louisiana, marking the Saudi Arabian chemical maker’s entrance into the North American market. Exxon already is building a new 1.5 million mt/year cracker at the chemical complex at its Baytown, Texas refinery, but Jeff Woodbury, vice president of investor relations and secretary, told analysts last week that the company expects global chemical demand to grow 1% above gross domestic product through 2040, and ethylene demand will grow about 4% per year. “That translates into capacity additions about 6 million to 7 million tons per annum of additional capacity,” he said.
LyondellBasell Industries said the company will move forward on a new 1.1 billion pounds (500,000 mt)-per-year high density polyethylene plant in La Porte, Texas, to start up in 2019 that will increase the company’s US polyethylene capacity by 18%. An ethylene capacity expansion at its Corpus Christi, Texas, complex also is expected to be finished by the end of the third quarter. However, Lyondell indefinitely delayed the 550 million pounds (250,000 mt)-per-year ethylene expansion at its Channelview, Texas facility that had been planned for 2017 for economic reasons, Chief Executive Bob Patel said. He also said Lyondell can take debottlenecking steps during a turnaround at Channelview in 2018 and 2019. In the near term, Lyondell will focus on the HDPE plant and a potential new propylene oxide/tertiary butyl alcohol plant in the Houston area. The company expects to decide in the first half of 2017 whether to move ahead with the PO/TBA plant, and “it looks good so far,” Patel said.
Enterprise Products Partners Chief Executive Jim Teague said last week the company expected the first ship at the company’s new ethane export facility at the Houston Ship Channel on Monday, but the vessel had not yet been called in while the terminal makes final preparations this...