Shale gas to feed huge U.S. chemical plant built by Japan’s JGC

Por • 17 nov, 2022 • Sección: Economía

MAMORU TSUGE, Nikkei staff writer

Tokyo, November 17, 2022  — Japanese engineering group JGC Holdings will build a massive plant in the U.S. to produce a key petrochemical from shale gas, Nikkei has learned, as high crude oil prices make production more cost effective.

JGC will partner with American construction company Kiewit to build the plant in Orange County in eastern Texas. It will be able to produce 2 million tonnes of ethylene a year, making it one of the largest such plants in the world. Construction is slated to finish around 2026.

Ethylene, a hydrocarbon gas often used to make plastics, is most commonly produced from oil distillate naphtha. But it can be produced more cheaply from shale gas.

A rise in crude oil prices, fueled by Russia’s war in Ukraine, has increased this cost advantage. Demand for ethylene is expected to remain high, despite efforts to make plastics from sources other than fossil fuels.

The order for the ethylene plant came from a joint venture of U.S.-based Chevron Phillips Chemical and QatarEnergy, the Middle Eastern country’s state-owned energy company.

The facility is part of plans for a petrochemical complex that will also produce high-density polyethylene (HDPE), one of the world’s most common plastics.

JGC will lead the project, and Kiewit will handle construction. The order is expected to be worth more than 100 billion yen ($717 million) for JGC.

The Texas project will be JGC’s second in North America, following a plant it built in 2013 that also was ordered by Chevron Phillips. Construction delays on that facility, caused by hurricanes and floods, forced JGC to report a net loss in the fourth quarter of the 2017 fiscal year.

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