(Houston Business Journal) -- After a few months of delays thanks to Hurricane Harvey, The Woodlands-based Chevron Phillips Chemical Co. is ready to put its new ethane cracker to work.
According to March 12 press release, the company has successfully introduced feedstock and begun operating the cracker, which is located at Chevron Phillips Chemical's Cedar Bayou facility in Baytown. This startup completes the final phase of the company's $6 billion U.S. Gulf Coast petrochemicals project that was announced in 2011.
Construction of the cracker began in 2014, and the unit was originally slated to come online in late 2017. However, Hurricane Harvey caused delays. In fact, the unit was nearly through much of the testing before the storm hit, Ron Corn, the company's senior vice president of petrochemicals, said in September.
At peak production, the ethane cracker will produce 3.3 billion pounds per year, and the release states it is "one of the largest and most energy-efficient crackers in the world."
Another part of Chevron Phillips' Gulf Coast petrochemicals project includes two polyethylene units in Old Ocean, Texas. Those units reached mechanical completion back in June and began startup procedures in September. In December, the company also purchased about 3,000 new rail cars as well as constructed a state-of-the-art storage-in-transition facility to ship polyethylene via rail.
The Old Ocean and Baytown investments are supposed to create 400 permanent jobs between them, according to the March 12 press release.
"Construction of these world-scale assets has been ongoing since 2014, and today, we are entering a new era of growth," Mark Lashier, president and CEO of Chevron Phillips Chemical, said in the release. "With global demand for ethylene and polyethylene poised for sustained long-term growth, the U.S. Gulf Coast Petrochemicals Project will allow Chevron Phillips Chemical to deliver high-quality products to our customers across the country and around the globe."
When Chevron Phillips first started looking at building an ethane cracker and polyethylene units near Houston, the project was a little outside of what the company had been doing in recent years. But the move anticipated the massive boom in U.S. natural gas production that had just begun in the country's shale basins, Tim Taylor, then-president of Phillips 66, said at an event in November celebrating the completion of the Old Ocean portion of the project. The company later announced Taylor would retire at the end of 2017.
"Born from the shale revolution that is providing low-cost feedstock, the U.S. Gulf Coast Petrochemicals Project is the most transformational project in the history of our company," Lashier said in the March 12 release. "Our company and our growing employee base, the communities we call home, and the entire Gulf Coast region's economy will benefit for decades to come as our project comes to life."
Meanwhile, Exxon Mobil Corp. (NYSE: XOM) should be nearly ready to start its new ethane cracker also in Baytown. In February, the company announced that the unit should begin production in the second quarter of 2018. The cracker will increase Exxon's ethylene capacity by 1.5 million tons per year.
