Chevron Phillips – Baytown Petchem Facility to be World’s Largest

Growing Feedstock Supplies Are Leading to Major Petchem Expansions

Chevron Phillips announced the company is going forward with a major petro-chemical facility at the Cedar Bayou Chemical Complex in Baytown, TX. The new plant will be the world’s largest on purpose 1-hexene plant and will be capable of producing 250,000,000 metric tons (551,000,000 lbs) per year.

The announcement follows a release less than two weeks ago that the company will expand NGL fractionation, at the Sweeny Plant in Old Ocean, TX, to 116,000 b/d. An increase in capacity of 22,000 b/d or almost 20%.

Both developments are the direct result of growing feedstock supplies from liquids plays that produce significant volumes of NGLs. We discussed the reasoning behind new fractionation and petchem facilities in more detail in a previous article titled Eagle Ford NGLs Adding to U.S. Supply Growth.

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Eagle Ford NGL Production Adding to U.S. Supply Growth

Eagle Ford Shale NGLs, along with other liquids producing plays, are helping make the U.S. competitive in the worldwide petrochemical market. “That’s a drastic change from just 10 years ago when companies thought there would never be another petrochemical facility built in America”, says Wood Mackenzie’s Senior NGL Analyst Larry Schwartz.

Eagle Ford NGL Production Growing to 300,000+ b/d

We recently sat down with Schwartz to get additional insight into the growing natural gas liquids (NGL) market in South Texas. In short, he expects the Eagle Ford will go from producing ZERO barrels of NGLs a few years ago to more than 300,000 barrels per day (b/d) by 2020. For reference, the EIA tracks processed volumes of NGL production (at the plant level) and as of the 4th quarter of 2011 the entire market is a little more than 2.2 million b/d. If total production held flat, the Eagle Ford would easily account for more than 10% of the total U.S. NGL market in 2020. [Read more…]