USGC petrochemicals project II agreement: Chevron Phillips Chemical Company and Qatar Petroleum have signed an agreement in the White House to jointly develop a new mega-petrochemical plant in the US Gulf Coast, to be named as the US Gulf Coast II Petrochemical Project (USGC petrochemicals project II).
The USGC II petrochemical project is planned to be built with an investment of nearly $8 billion. The agreement between the two companies was inked in front of the US President Donald Trump and Qatar Amir Sheikh Tamim bin Hamad Al Thani.
Chevron Phillips Chemical Company – a joint venture between Chevron and Phillips 66, has a $6 billion petrochemical complex in the region already in the form of the US Gulf Coast Petrochemicals Project.
USGC petrochemicals project II
The new USGC II petrochemical facility will have an ethylene cracker, which will have a capacity of two million tons per annum, and two high-density polyethylene units, with each of them to have a capacity of a million tons per year.
USGC petrochemicals project II, which is expected to be commissioned in 2024, is set to have direct access to considerable quantities of ethane drawn from various US shale basins, including the Permian Basin.
Chevron Phillips Chemical Company will own a 51% stake in the US Gulf Coast II Petrochemical Project and its partner Qatar Petroleum will have a 49% stake. The US-based company will be responsible for project management and oversight, and also the operation and management of the new US Gulf Coast petrochemical facility.
In June 2019, the same firms struck a similar deal, which was in Qatar to develop a petrochemicals facility in the country in Ras Laffan Industrial City, for the production of ethylene and high-density polyethylene (HDPE). In this Qatari petrochemical facility, Qatar Petroleum will hold the majority stake of 70%.
The petrochemical complex in Qatar, which is expected to be commissioned in 2025, will have a nameplate capacity of 1.9 million tons of ethylene per annum, which will make it the largest ethane cracker in the Middle East and one of the largest in the world as well, said Qatar Petroleum.
Saad Sherida Al-Kaabi – Qatar Minister of State for Energy Affairs, the President and CEO of Qatar Petroleum, commenting on the USGC petrochemicals project II, said: “This is the second agreement of its kind in as many weeks, with our trusted partner, Chevron Phillips Chemical, to further cement the strong partnership between our two companies and to complement Qatar Petroleum’s international portfolio in the United States, which is a core growth area for us as we believe it has great prospects and growth opportunities.”
“This important project will help meet increasing global demand for petrochemicals market. It also showcases the momentum of Qatar Petroleum’s international growth strategy, which has taken robust steps in various upstream and downstream activities in many parts of the world.”
The engineering, procurement and construction (EPC) contracts for the USGC petrochemicals project II is planned to be awarded in 2021.
Commenting on the USGC petrochemicals project II, Mark Lashier – the president and CEO of Chevron Phillips Chemical, said “Qatar Petroleum is already a terrific partner of Chevron Phillips Chemical on petrochemical ventures in Qatar and we look forward to expanding our relationship in the United States as we jointly seek to develop a new petrochemical facility along the U.S. Gulf Coast.
“Qatar Petroleum’s financial strength, its commitment to safety as a core value and shared belief in our strategy to build facilities located close to competitive feedstocks makes this an ideal relationship.”