Chevron Phillips Chemical Co. is adding to the petrochemical party.
The Woodlands-based company on Monday announced it would build in Baytown the world's largest plant, by capacity, for making a key component of plastic resin: 1-hexene.
The plant, which Chevron Phillips will begin building this year, is scheduled to start operations in the first quarter of 2014 and have an annual production capacity of 250,000 metric tons, or 551 million pounds, according to a company announcement.
Natural gas a big factor
The plant is the latest industry project aimed at taking advantage of newly tapped supplies of natural gas liquids that are expected to be abundant and cheap amid a boom in production from shale.
The chemical 1-hexene, derived from ethylene, is used to manufacture polyethylene, which in turn is commonly converted into film, pipe, detergent bottles, and food and beverage containers.
Ethylene itself is derived from ethane, for which production has grown substantially in the United States because of advances in drilling techniques that have tapped into large, cheap supplies of natural gas liquids.
"This is good news," said Chuck Carr, director of propylene studies for IHS Chemical. "You're building derivative capacity that soaks up the ethylene and helps soak up the NGLs that are being produced."
Chevron Phillips, a joint venture between Chevron Corp. and ConocoPhillips, did not disclose the cost for the plant.
The project will create up to 500 construction and engineering jobs before it is completed and will sustain 14 long-term direct jobs, spokeswoman Melanie Samuelson said.
Chevron Phillips also plans to build its $5 billion U.S. Gulf Coast Petrochemicals Project at the same Baytown facility, adding an ethane cracker there. It announced plans last week to expand its natural gas liquids processing complex in Old Ocean, Texas, adding 22,000 barrels a day of capacity by February 2013.
Others are eager
Other companies are eyeing increases in domestic natural gas liquids production as they position themselves for expanded petrochemical opportunities in the United States.
Dow Chemical Co., which announced plans Monday to shut down several redundant Styrofoam plants and lay off 900 workers worldwide, is still moving "full steam ahead" with $4 billion of shale-related petrochemical projects in the U.S., spokeswoman Rebecca Bentley said.
"This just really makes some more selective and strategic moves to enable us to position for growth in those areas," Bentley said of the planned shutdowns.
Shell is evaluating development of an ethane cracker in Pennsylvania, which would likely add another multibillion-dollar petrochemical investment to the United States.
With the expected growth in ethane production, demand has increased for derivatives like 1-hexene, Samuelson said. That made the new plant attractive for Chevron Phillips, she said.
Copyright 2012 The Houston Chronicle Publishing Company. All Rights Reserved.
(Originally published April 3, 2012, in The Houston Chronicle.)