Chevron poised to benefit from steam cracking assets in Middle East, USA

13-Mar-13

With 100% of its ethylene cracking capacity located in the Middle East and North America, US oil and petrochemical major Chevron is poised to benefit financially and competitively from its access to cheap feedstock, as per Platts. CPChem, currently the world's largest producer of high density polyethylene, operates several steamcrackers in Qatar and Saudi Arabia through joint ventures, as well as wholly owned assets in the US. It has total ethylene capacity of about 7.8 mln m tons (17.19 bln lbs) a year, with US assets totaling around 3.5 mln mt/year, and Qatar and Saudi assets around 4.3 mln mt/year. "Our ethylene cracking portfolio is entirely positioned in these two attractive regions (where ethane gas prices are much cheaper than naphtha in Asia). This foundation and strong operating performance is formula from strong financial result (in petrochemicals)," Mike Wirth, executive vice president of Chevron's Downstream and Chemicals unit, said in an analyst call. Chevron anticipates that demand for its petrochemical products would grow 43% between 2010 to 2020, Wirth said, adding that Asia will continue to the primary growth engine, while growth in the company's lubricants and petchems unit will be "faster than fuels." The company has sold underperforming or non-strategic assets, simplified operations and reduced costs. Plans are to maintain a focused and competitive portfolio, and selectively pursue growth in petrochemicals and lubricants.