MOSCOW (MRC) -- MEGlobal inaugurated its 750,000-metric ton/year ethylene glycol (EG) unit at Oyster Creek, Texas on 10 Septmber. The plant is in final start-up stages and expected to produce on-spec product within 30 days, reported Chemweek with reference to officials' statement.
“With a growing global market for EG products, it will provide us with greater flexibility to satisfy our customers’ needs while capitalizing on the US shale gas opportunity,” says Ramesh Ramachandran, president and CEO of Equate, MEGlobal’s parent. Equate is a joint venture between Kuwait Petroleum’s Petrochemical Industries Company (PIC) and Dow, which each own a 42.5% stake. Boubyan Petrochemicals Co. has a 9% ownership and Qurain Petrochemical Industries owns 6%.
The plant, Equate’s first in the United States, has capacity for 700,000 metric tons/year of monoethylene glycol (MEG) and 50,000 metric tons/year of diethylene glycol (DEG). Total investment was USD2 billion, including a capital contribution to Dow that secured ethylene feedstock supply at producer economics.
EG demand continues to grow at more than 5%/year led by polyethylene terephthalate (PET) and polyester fiber, which combined account for roughly 85% of MEG demand.
EG prices have weakened in the past year and US supply has lengthened with new plants starting up this year Lotte and Sasol, which have both recently started separately world scale units at Lake Charles, Louisiana.
"You have to acknowledge recent [margin erosion], but if you look at fundamentals of EG, the end uses are PET bottles and polyester fiber," Ramachandran says. Polyester growth has been 5-7.5%/year and PET also demand remains strong, he adds. "If you believe in GDP growth, polyester demand is going to grow. If you look at the capacity that it's coming on, including ours, it barely keeps up with what the market growth is."
Equate and MEGlobal also have EG production in Alberta, Canada as well as Kuwait. The global production footprint is an advantage given recent trade tensions. US EG exports to China are challenged by 25% tariffs but MEGlobal can export US production to Latin America and India while Canadian and Kuwait product will target China.
MEG is one of the main feedstocks for the production of polyethylene terephthalate (PET).
According to MRC's ScanPlast report, Russia;s estimated PET consumption decreased in July 2019 by 4% year on year. 428,790 tonnes of PET were processed in Russia over January-July 2019. Russia's PET production was 44,430 tonnes in July.
MEGlobal is a world leader in the manufacture and marketing of merchant monoethylene glycol and diethylene glycol (EG). Established in July 2004, the company is a joint venture between The Dow Chemical Company and Petrochemical Industries Company of Kuwait and is headquartered in Dubai, United Arab Emirates. With approximately 200 employees worldwide, MEGlobal serves customers around the world, and has production facilities in Fort Saskatchewan and Prentiss, Alberta, Canada.
MRC