Petrochemical Corridor Attracts Investment

by | Apr 8, 2014

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petroThe Gulf Coast petrochemical corridor has attracted foreign investment because of cheap natural gas and lower costs, Fuel Fix reports.

The price advantage of US-produced ethane, used in plastics manufacturing, over naptha is a key factor. Naptha is derived from petroleum, which is more expensive.

More than $90 billion of new plants and plant expansions are planned or under construction in the petrochemical belt that stretches from the Upper Texas Coast to New Orleans.

Foreign investors include South Africa-based Sasol, which is building a $5 billion ethane cracker to split ethane into component parts in Louisiana, and a $14 billion gas-to-liquids plant, which will convert natural gas into diesel and other products.

In February 2012, Taiwan-based Formosa announced plans to build a $1.7 billion expansion of its Point Comfort plastic plant. Linde Group, a Germany-based industrial gas producer, plans a $200 million investment in new equipment for its plant in La Porte.

New plants and expansions will increase the capacity of the petrochemical industry 33 percent by 2017, according to a December report by the Federal Reserve Bank of Dallas.

U.S. companies, including Dow Chemical, Exxon Mobil Corp. and Chevron Phillips Chemical, also have been motivated by lower natural gas prices, and are making multibillion dollar investments in new and upgraded facilities.

Photo: Roy Luck Flickr photostream

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