BASF Total Petrochemicals is among a growing list of chemical manufacturers announcing expansion plans, thanks to abundant supplies of natural gas from shale.
The company, a joint venture formed last year between BASF Corp. and Total Petrochemicals & Refining, has revamped its Port Arthur, Tx., steam cracker to process ethane transported from Mont Belvieu, Tx., FuelFix reported. The plant, with a capacity of 1 million tons of ethylene per year, was originally commissioned in 2001 to process naptha, a petroleum-based product.
According to to Patrick Pouyanne, president of Total Refining & Chemicals, the company adapted the cracker because of changes in the global energy markets and the plunge in U.S. natural gas prices:
In response to petroleum product price hike and the emergence of abundant gas resources, we adapted the steam cracker to give it flexibility and maintain its competitiveness. It can now use as a feedstock ethane, which costs around $30 per barrel of oil equivalent (boe)—versus around $100/boe for naptha—and liquefied petroleum gases such as butane and propane, which are also cheaper.
The company has also begun building an additional ethane cracking furnace, scheduled to be completed in 2014, which will improve the steam cracker’s availability and increase its cracking capacity by almost 15 percent.
The BASF Total Petrochemicals’ project is the latest proof point of a fast-growing and exciting trend, one that is bolstering the U.S. economy and creating a manufacturing renaissance in America.
In late May, the American Chemistry Council issued a report that examined 97 announced chemical and plastics projects totaling $71.7 billion in potential new U.S. investment. Half of the companies that have announced investments are based outside the U.S.
By 2020, the projects can lead to the creation of 46,000 chemical industry jobs, another 264,000 jobs in supplier industries and 226,000 “payroll-induced” jobs in communities where workers spend their wages, generating $20 billion in federal, state and local tax revenue, the report found.
