Ethylene Industry: $15.6 Billion of North American 'Second Wave' Projects Hang in the Balance

Researched by Industrial Info Resources (Sugar Land, Texas)--Between now and the end of 2018, the Chemical Processing Industry expects to see almost $15 billion in ethylene-production projects begin operations, according to Industrial Info's project database. But from 2019 through the second quarter of 2020, a second wave of projects worth roughly $15.6 billion are facing a less certain future; although many are highly anticipated, most have faced delays to due to market conditions and have not yet received approval.

How far and how many of these projects proceed will depend, among other factors, on whether those set to begin production before 2019 (the first wave of new capacity) meet current demand. The second wave of new ethylene capacity could be substantially smaller than what is currently planned, if demand for downstream derivatives (such as polyethylene, ethanol and vinyl acetate) are satisfied by ethylene already in the construction phase.

If crude oil prices remain cheap for years to come, a second wave of ethylene construction and related expansion projects likely would face continued delays or even be cancelled entirely.

Listed below are the highest-value ethylene projects that are nominally set to begin production from 2019 through second-quarter of 2020:

$2 Billion: Axiall and Lotte Chemical's Unit Addition in Westlake, Louisiana
Axiall Corporation (NYSE:AXLL) (Lake Charles, Louisiana) and Lotte Chemical Corporation (Seoul, South Korea) are partners in a 50:50 joint venture to build a 1 million-metric-ton-per-year ethane cracker... The unit is expected to provide feedstock for a monoethylene glycol (MEG) unit that is being planned in Westlake by Axiall and Lotte Chemical.

In February, the two companies postponed their final investment decision following a six-month front-end engineering and design (FEED) study. Executives cited uncertainly in energy, feedstock and labor markets. They expect to announce soon if the project will move forward.

For details on this expansion project, see Industrial Info's project report.

$1.6 Billion: Shintech's Unit Addition in Plaquemine, Louisiana
Shintech Incorporated (Houston, Texas), a subsidiary of Japan's Shin-Etsu Chemical Company Limited, is performing site preparation for a 1 million-ton-per-year ethylene unit. The product will supply two nearby Shintech plants that produce vinyl chloride monomers and polyvinyl chloride.

The project has been highly anticipated, with the state of Louisiana providing it with a $5 million grant to offset the infrastructure costs and a $5 million tax credit. Chicago Bridge & Iron Company (NYSE:CBI) (The Hague, Netherlands) is serving as the technology provider. Groundbreaking was in June, and completion is expected toward the end of 2019.

For details on this expansion project, see Industrial Info's project report.

$5 Billion: Appalachian Shale Cracker Enterprise's Petrochemical Complex in Washington, West Virginia
For details on this construction project, see Industrial Info's project report.

$2.5 Billion: Shell's Ethylene Plant in Monaca, Pennsylvania
For details on this construction project, see Industrial Info's project report.

$2 Billion: Williams Partners' Ethane Cracker/Ethylene Unit in Geismar, Louisiana
For details on this construction project, see Industrial Info's project report.

$1.6 Billion: Total's Ethane Cracker in Port Arthur, Texas
For details on this construction project, see Industrial Info's project report.

$500 Million: Siluria Technologies' Ethylene Plant in La Porte, Texas
For details on this construction project, see Industrial Info's project report.

$400 Million: NOVA's Expansion in Corunna, Ontario
For details on this expansion project, see Industrial Info's project report.

$60 Million: Du Pont's Expansion in Orange, Texas
For details on this expansion project, see Industrial Info's project report.

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