Ethylene supplies assured with Oxychem & Mexichem 50:50 JV cracker

08-May-17

Occidental Chemical's 50:50 joint venture cracker with Mexican PVC producer Mexichem will provide it with an ongoing source of ethylene, as per Platts. The steam cracker, which will be operated by Oxychem, will be capable of producing 1.2 billion lb (550,000 mt/year) of ethylene. The project was completed on schedule and on budget, according to Oxychem and Mexichem.

"The cracker is the first cracker constructed in the United States in 15 years," Oxychem President Rob Peterson said. He added that no future ethylene purchases are expected. Oxychem is expected take the ethylene to produce downstream vinyl chloride monomer which will then be exported to Mexichem's operations in Mexico and Colombia to produce PVC, Peterson said. The companies have a 20-year supply agreement.

The Ingleside Ethylene JV is a steam cracker adjacent to OxyChem's complex in Ingleside, along with pipeline and storage facilities in Markham. It was unclear when full rates will be reached this year but Mexichem said April 27 during its first-quarter earnings call that its estimate of a 70% run rate for 2017 still holds.