Celanese Plans $250 Million-$300 Million Capex for 2017

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Researched by Industrial Info Resources (Sugar Land, Texas)--Acetyls producer Celanese (NYSE: CE) (Irving, Texas) expects capital expenditures for this year to run between $250 million and $300 million this year, company executives said Tuesday. The company's chemical processing complex in Clear Lake, Texas, is down this month for a major maintenance turnaround.

Celanese has unusually heavy turnaround activity planned for the first half of this year, according to its executives.

Celanese leaders said during the company's first-quarter 2017 earnings presentation on Tuesday that the acetic acid unit and methanol unit at Clear Lake are offline for a major turnaround. "By any measure it is a very big outage," one executive said, adding it includes the replacement of utility systems.

The plant-wide maintenance turnaround includes the 675 million-pound-per-year ethylene oxide unit, the 1.2 million-metric-ton-per-year acetic acid unit, the 310,000 million-metric-ton-per-year vinyl acetate unit and the 1.3 million metric-ton-per-year methanol unit. The turnaround is scheduled to be completed in May.

Celanese reported $184 million in net earnings for the just-ended first quarter, compared with $259 million in first-quarter 2016. Capital expenditures totaled $246 million in 2016, according to the company.

Chief Executive Officer Mark Rohr said the company's acetyl chain business experienced sharply higher raw material costs, particularly in China, but the business managed to drive price increases across the board. Rohr said he expects raw material price inflation to be roughly $200 million this year. Sales volumes were lower compared with the first quarter of last year. Lower volume was also driven by a decision to sell less vinyl acetate monomer (VAM) in China because it was less price competitive.

Industrial Info is tracking $940 million in capital project activity by Celanese. This includes a planned expansion project to increase VAM production at the Clear Lake complex from the current 300,000 tons per year to 450,000 tons per year. The project is undergoing front end engineering design (FEED) studies and preliminary design. Construction could kick off in late 2017. Wood Group Mustang (Houston, Texas) is providing the project engineering services.

Celanese also continues to consider a 1.3-million-ton-per-year methanol addition in Bishop, Texas. Construction is currently set for kickoff in mid-2018. However, the project has already seen 38 months in slippage from the originally planned kick-off.

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