Chexpress - March 20, 2012

North America

Expansion

Superior Steel Inc. will invest more than $1 million in new equipment for a fabricated steel plant in Denham Springs, Louisiana. The plant will grow to about 90,000 square feet. The expansion should be operational by September.

Cracker Site Option Agreement

Shell Chemical LP signed a land option agreement with Horsehead Corporation to evaluate a site in the U.S. Appalachian region for a potential petrochemical complex. The complex includes an ethane cracker that would upgrade locally produced ethane from Marcellus Shale gas production. The site is located in Potter and Center Townships in Beaver County near Monaca, Pennsylvania. The next steps for this product include additional environmental analysis of the preferred Pennsylvania site, further engineering design studies, assessment of the local ethane supply, and continued evaluation of the economic viability of the project. In addition to an ethane cracker, Shell is also considering polyethylene (PE) and mono-ethylene glycol (MEG) units to help meet increasing demands in North America.

Gas Plant

Chesapeake Energy will work with partners to build a $900 million natural gas processing plant in Columbiana County, Ohio. The complex, parts of which are scheduled to be in service by June 2012, will provide support to the companies that are extracting natural gas and natural gas liquids from Ohio’s Utica shale. The $900 million investment will be made over five years. Chesapeake and its affiliates will own 59 percent of the project; M3 Midstream will own 33 percent; and EV Energy Partners will own 8 percent. The plant will gather, compress and process natural gas. It will have an initial capacity of 600 million cubic feet of gas/day.

World

Expansion

Flexys Chemicals Sdn Bhd, a unit of U.S.-based Solutia Inc., is investing RM450 million to expand its soluble sulfur and resin manufacturing operations in Kuantan, Malyasia. Plans are also underway to double the production of soluble sulfur, which is used in the production of rubber tires, in the coming years.

Doubling Capacity

Chevron has decided to move ahead with a multi-million-dollar expansion to double the capacity of its Oronite lubricant additives plant on Jurong Island. The investment will allow the Singapore plant to cater to strong demand growth in the Asia-Pacific region. The expansion is scheduled for completion in 2014 and will more than double the size of the facility since it was commissioned. The investment amount was not disclosed.

Contract Awarded

Technip has been awarded a front-end engineering design (FEED) contract by PETRONAS for its proposed Refinery and Petrochemical Integrated Development (RAPID) project located in Johor, Malaysia. RAPID aims at building a world-scale integrated refinery and petrochemical complex to address the growing need for specialty chemicals and to meet the demand for petroleum and commodity petrochemical products in the Asia-Pacific region by 2016. The proposed refinery will have a capacity of 300,000 barrels/day and will supply naphtha and liquid petroleum gas feedstock for the RAPID petrochemical complex, as well as produce gasoline and diesel that meet European specifications. The contract is scheduled for completion in the second part of 2013.

Petrochemical Complex

ExxonMobil’s second petrochemicals complex in Singapore is nearly complete. Costing somewhere between $5 billion and $6 billion, the commissioning and start-up activities are expected to continue through 2012. The expansion will add 2.6 million tons/year of additional capacity and will help meet demand growth in the Asia-Pacific region. The expansion was scheduled to be operational in the second half of last year, but was delayed by a year, with full project start-up now expected in the second half of this year. The delay was caused by construction issues arising from the project’s scale and complexity.

Petrochemical Complex

South Korea’s SK Group has agreed to build a $1.1 billion petrochemicals complex in Chongqing, China jointly with China’s state-owned Sinopec and BP. The complex will have the capacity to produce 200,000 mt/year of butanediol, 600,000 mt/year of acetic acide and 250,000 mt/year of ammonia. The butanediol plant will be built and run by a joint venture between SK and Sinopec. It will be the biggest plant in China producing butanediol to make spandex, synthetic leather and polyurethane. The acetic acid plant will be constructed and run by a joint venture between BP and Sinopec. The ammonia plant will be built and run solely by Sinopec.