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PTTCG America expects pandemic to delay final go-ahead for Ohio project

April 17/2020

MOSCOW (MRC) -- PTTGC America expects fallout from the coronavirus pandemic to further delay its final investment decision to launch major construction on a petrochemical complex in southeast Ohio, reported S&P Global with reference to the company's statement in an email Wednesday.

"We do believe FID will be impacted by the health crisis, but at this point it is difficult to predict how," the company said on Wednesday. "The companies are doing all they can to reach FID as quickly as possible, but as you know, there are things out of their control."

PTTGC America and its partner, Daelim Chemical USA, "would begin construction pretty much immediately after FID," the company said.

PTTGC, the US arm of Thailand's PTT Global Chemical, has repeatedly delayed FID for the project, with the latest timeline targeting the first half of 2020. The companies received a necessary permit in December 2018 from Ohio's Environmental Protection Agency, and the FID delays allowed more time to evaluate engineering designs, and site preparation work began in mid-2019.

The companies said in February that preparation work was completed, and activity would be "significantly reduced" for the next two to three months as financing and supply agreements were finalized.

The project includes a 1.5 million mt/year ethane cracker and four derivative polyethylene plants with a combined capacity of 1.6 million mt/year in Shadyside, Ohio.

The new complex would be part of a second wave of new petrochemical projects fueled by cheap feedstocks and the second in the US Northeast, home to the Marcellus and Utica natural gas shale plays. The first wave involved eight crackers and 13 PE plants, most of which have come online.

However, the pandemic has prompted some projects, including Shell's USD6 billion complex in southwest Pennsylvania, to suspend construction work. Such projects bring hundreds of contractors to sites, and social distancing measures deemed necessary to combat the spread of the pandemic would be difficult to maintain during such work.

Shell in March said the company temporarily suspended work at the complex, and would consider a phased construction ramp-up after imposing additional mitigation measures aligned with US Centers for Disease Control and Prevention guidelines.

Other projects that have stopped or slowed work include FG LA's "Sunshine Project" involving two new 1.2 million mt/year crackers and four new PE plants with a combined 1.6 million mt/year capacity; LyondellBasell's new USD2.4 billion propylene oxide/tertiary butyl alcohol plant east of Houston; and NOVA Chemicals' new 454,000 mt/year PE facility and cracker expansion in Ontario.

As MRC informed earlier, PTT Global Chemical (PTTGC) fully restarted its No. 2 cracker in Map Ta Phut in early March,2020, after a planned turnaround. The company started resuming operations at the cracker by end-February, 2020. The cracker was shut for maintenance on January 20, 2020. Located at Map Ta Phut, Thailand, the No. 2 cracker has an ethylene production capacity of 400,000 mt/year. The company also operates No. 1 cracker at the same site with a capacity of 515,000 tonnes of ethylene and 310,000 tonnes of propylene per year, which was also shut on 23 January, 2020, for a 40-day turnaround.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.


mrcplast.com
Author:Margaret Volkova
Tags:PP, PE, LLDPE, crude and gaz condensate, homopolymer PP, propylene, HDPE, ethylene, petrochemistry, LyondellBasell, Nova Chemicals, PTT Chemical, Shell, Russia, USA, Thailand.
Category:General News
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