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Rising demand for hydrogen attracts interest of US Gulf Coast petrochemical companies

October 22/2020

MOSCOW (MRC) -- Top executives of companies like Westlake Chemical and LyondellBasell are paying increasing attention to hydrogen, including the potential for turning ‘gray’ hydrogen into increasingly demanded environmentally friendly versions, according to Hydrocarbonprocessing.

Hydrogen does not emit carbon when used as fuel. It can store energy, or provide power to vehicles and homes. It can be transported as gas or liquid.

When hydrogen releases energy it only leaves behind water vapor. But hydrogen production does release carbon dioxide. Gray hydrogen comes from hydrocarbons while green comes from renewables. Blue hydrogen comes from processes that include carbon re-capture.

Petrochemical companies mostly produce gray hydrogen, as it is based on fossil energy like ethane or propane. Production comes as a by-product.

There is increasing interest in hydrogen across the US, including "places like the Gulf Coast, where they already have a lot of hydrogen in the infrastructure and are wondering what is their future in the energy and how will they transition by taking advantage of infrastructure they already have,” Dave Edwards, Air Liquide's hydrogen director, said.

Westlake produces a fair amount of gray hydrogen during the cracking process, as a by-product of ethylene and currently uses it as fuel.

Ethylene is the target molecule during ethane cracking, but the process also yields a fair amount of gray hydrogen. Westlake also produces smaller volumes of hydrogen when making chlorine.

Albert Chao, CEO of Westlake Chemical Corp, said during the second quarter earnings discussion on Aug. 7 that the company wants to “enter” the hydrogen economy, according to a call transcript by ThomsonReuters Street Events.

“We produce hydrogen from our colocalize cells. So we produce not a whole lot of amount because when you do electrolysis on salt brine to make chlorine caustic, there's water in the salt brine, and they turn into hydrogen as well,” Chao said.

“We do produce hydrogen from a chlor-alkali plant as well as ethylene plants. So we are all ears, and we want to enter into the hydrogen economy, and we have a way to supply with today's production without adding any more capacities,” he added.

“We could buy renewable power, then we become green from the chlor-alkali plants,” Chao added.

“We certainly do look at times of using hydrogen at a higher value and not just as fuel, but selling that back into the merchant market,” Westlake Chemical Corp.’s CFO Steve Bender said.

Regarding plans to produce hydrogen other than gray, that “is something that we're looking at and paying attention to, but it's something we'll just have to see if there's an underlying value stream long term if we want to look at doing anything on that front more broadly,” Bender added.

An analyst posing a question during an earnings discussion on July 31 estimated that based on LyondellBasell’s ethylene capacity, the company likely produced “hundreds of thousands of tons of hydrogen a year.”

“Indeed, we do produce a lot of hydrogen off of our crackers, especially the ethane crackers,” LyondellBasell CEO Bhavesh Patel said, according to a call transcript by Motley Fool.

“We have some integration with the refinery, as you noted. We also sell some crude hydrogen to industrial gas companies who then refine the hydrogen,” Patel said.

“So there's a mix. Some of it is fuel, some of it is sold to industrial gas companies, and then and the balance goes back to our refinery,” he added.

“And we'll look at that over time as we see industrial gas companies finding new uses for hydrogen to see if we can sell more to them and recover,” Patel said.

Another petrochemical process that produces hydrogen as a by-product is propane de-hydrogenation (PDH). PDH plants produces polymer grade propylene (PGP).

In 2018 Enterprise Products PDH produced hydrogen at Mont Belvieu, Texas helped Air Products add 40 million standard cubic feet per day to its Gulf Coast system.

Air Products’ Gulf Coast system, stretching from Houston to New Orleans, provides over 1.4 billion standard cubic feet of hydrogen per day to refinery and petrochemicals customers with 22 Air Products’ hydrogen facilities feeding a 600-mile pipeline.

Hydrogen is used in petroleum refining processes to remove sulfur, olefins and aromatics to meet specifications.

As MRC reported earlier, in September, 2020, LyondellBasell, one of the largest plastics, chemicals and refining companies in the world, released its annual Sustainability Report with the aim of affecting positive change and is focused on three transformational areas including plastic waste, climate change, and thriving societies. LyondellBasell announced one of the most ambitious goals of the industry to produce and market two million metric tons of recycled and renewable-based polymers annually by 2030. The report showcases LyondellBasell's strategy and ambitions for the next decade.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
Author:Margaret Volkova
Tags:PP, PE, LLDPE, crude and gaz condensate, PP random copolymer, propylene, ethylene, petrochemistry, Enterprise Products, LyondellBasell, Westlake Chemical, Russia, USA.
Category:General News
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