Mcilvaine Insights

No. 101   April 18, 2019

WELCOME

Weekly selected highlights in flow control, treatment and combustion from the many McIlvaine publications.

• The Lowest Total Cost of Ownership Cycle for Oil and Gas CFT Products
• Most Profitable Petrochemical Markets for CFT Suppliers
• Treatment Chemicals Most Profitable Market Analyses based on Knowledge

The Lowest Total Cost of Ownership Cycle for Oil and Gas CFT Products

The Most Profitable Market (MPM) Program entails identifying markets where products with lower total cost of ownership can be developed and then evaluating the market potential. This is better done holistically. This approach involves knowledge of the processes and the products in each process. The silos between industries need to be penetrated and collaboration among disparate suppliers encouraged. A good case in point is the use of resin bonded sand for hydraulic fracturing.  Dow Chemical introduced a new resin for sand coating in 2014. The polyurethane offers more elasticity than phenolics. As a result the fractures do not collapse. Collapsing leads to sand particles in the product.  As the product is transported by the electric submersible pump, the sand abrades the impellers.  Pumps with an initial cost of over $100,000 can experience life cycles measured in months.

This life has been extended when resin coated sand is utilized. The overall cost of oil extraction is lessened. With lower feedstock costs, the resin is less costly to manufacture. This can lead to lower resin prices and even more reason to select resin coated over uncoated sand.

This cycle can be useful to pump companies such as Veretek. They cite a case where their new  V pump lasted for one year whereas the original ESP pump lasted only three weeks. In other cases the difference in pump life has been less. How much more can the owner afford to pay for the Veretek pump? The evaluation of the resin bonded sand alternative has to also be considered. The market potential for Veretek is impacted by the  resin bonded sand effect on pump erosion and by the additional cost of the resin coated sand.

Preferred Sands partnered with Dow in the introduction of the Dow coating. How much more can they charge for resin coated sand? Are the purchasers fully aware of the cost of sand erosion on pumps or the ability of the Preferred Sands proppant to reduce that cost?

The holistic approach is integral to the Most Profitable Market Program.  More details on this program are shown at  http://home.mcilvainecompany.com/index.php/component/content/article/30-general/1469-most-profitable-market-program

Bob McIlvaine can answer your questions at 847 784 -0012 ext. 122, cell 847 226 2391  rmcilvaine@mcilvainecompany.com

Most Profitable Petrochemical Markets for CFT Suppliers

Petrochemicals represents one of the largest markets for Combust, Flow and Treat (CFT) suppliers. The McIlvaine Most Profitable Market Program helps suppliers identify the most profitable opportunities at each potential large prospect.  Overviews, plant analyses and project data are supplied for each large prospect.  This continuing flow of information facilitates continuous forecasting of the Most Profitable Markets.

The foundation of the analyses are present in projected production. Ethylene is a major petrochemical.  Forecasts are provided for future production in each country

Ethylene Forecasts (1000TPY)

Present production at each major plant is also gathered.

Detailed information is compiled for the producers comprising most of the market.  Here are excerpts on LyondellBasell.

Overview

LyondellBasell manufactures in 24 countries. Net income in 2018 was  $4.7 billion. Enterprise value exceeds $40 billion.  It is the #1 supplier of polypropylene  in Europe and the U.S. It is the # 1 supplier of polyethylene in Europe and the # 1 supplier of propylene oxide worldwide.

LyondellBasell recently expanded capacity at three of its facilities in La Porte, Corpus Christi and Channelview, increasing its annual ethylene production capacity by 2 billion pounds. It is  now completing a $700 million facility at its La Porte complex with the annual capacity of more than 1 billion pounds of high-density polyethylene, the world’s most common plastic.

The company also plans to build the world's largest propylene oxide and tertiary butyl alcohol plant at its Channelview complex to produce chemicals for furniture, automobiles, adhesives and other uses. The $2.4 billion project, the company’s largest investment to date, is based on its belief of the U.S. petrochemicals retaining a competitive edge in the global market.

Project Information

Plant and project information is added continually to an Oil, Gas, and Refining Program which covers petrochemicals and to an Industrial Plants and Projects program which covers intermediates and end products.

LyondellBasell Boosts Corpus Christi Ethylene Capacity by 50 Percent

LyondellBasell has completed its 800 million pounds-per-year ethylene expansion project at its Corpus Christi, Texas, facility, the company announced January 19. "As we look to meet growing, global demand for our products, we continue to seek the right opportunities that ensure we are well positioned for the longer term," stated Bob Patel, LyondellBasell CEO and chairman of the management board, in a press release. "By expanding ethylene capacity in the U.S. through debottlenecks rather than long and costly greenfield developments, we quickly added substantial capacity for significantly less than the cost of a new plant." LyondellBasell noted the expansion allows the Corpus Christi facility to now produce 2.5 billion pounds-per-year of the basic chemical building block ethylene, which is used in housewares, construction materials, automotive parts, food packaging and personal care products. The Corpus Christ project wraps up a multi-year initiative by the company to add 2 billion pounds of U.S. ethylene production capacity. Over the past 5 years, LyondellBasell has spent approximately $2 billion on U.S. Gulf Coast expansions and plans to invest another $3 billion in the region, the company noted. Later this year, it plans to begin construction on a high density polyethylene (HDPE) plant in LaPorte, Texas, targeted for a 2019 start-up. Also, the company reported that it is making progress on development of a world-scale propylene oxide and tertiary butyl alcohol (PO/TBA) plant at its Channelview, Texas, facility.

Revision Date:  2/9/2017

Tags:  325110 - Petrochemical Manufacturing ??????, LyondellBasell, Expansion, Production Capacity, USA

LyondellBasell Breaks Ground on Texas PE Project (T17)

LyondellBasell said May 16 that it has begun construction on the first Hyperzone polyethylene (PE) plant at its complex in La Porte, Texas. "Today represents the launch of our latest innovation in plastics technology," LyondellBasell CEO Bob Patel stated in a press release. "The new Hyperzone PE plant will produce a better plastic that advances solutions to modern challenges, like protecting the purity of water supplies through stronger and more versatile pipes and ensuring the freshness of bulk foods by providing tough, crack-resistant containers for storage. This is truly a global effort developed by an international team, built to serve worldwide markets." According to LyondellBasell, the project will create up to 1,000 jobs at the peak of construction and 75 permanent positions during operations. Created by LyondellBasell research and development teams in Italy, Germany and the U.S., Hyperzone PE technology facilitates the production of cost-effective, lightweight plastics that are strong, durable and recyclable, the company stated. In addition, the technology reportedly enables the manufacture of a broad spectrum of high density PE (HDPE) products in just one plant rather than multiple plants. LyondellBasell said the new Hyperzone plant will more than double the LaPorte Complex's annual PE capacity to 2 billion pounds (900,000 metric tons). The company anticipates a 2019 startup, and it plans to make the PE process technology available for licensing in the future. Separately, LyondellBasell said that development of a world-scale propylene oxide and tertiary butyl alcohol (PO/TBA) plant at its Channelview, Texas, site is progressing. The company anticipates a final investment decision for the PO/TBA project in the second half of this year.

Revision Date:  5/23/2017

Tags:  325110 - Petrochemical Manufacturing ??????, LyondellBasell, Construction, USA

LyondellBasell Advances $2.4 Bln Gulf Coast Petchem Project (08, T18)

LyondellBasell Industries NV has reached final investment decision on its previously proposed plan to build what it is calling the world’s largest propylene oxide (PO) and tertiary butyl alcohol (TBA) plant at the company’s Houston-area complex in Channelview, Tex.

Revision Date:  11/13/2017

Tags:  325110 - Petrochemical Manufacturing ??????, LyondellBasell, Facility, Project, Production, Investment Decision, Construction, USA

LyondellBasell Breaks Ground on the World’s Largest PO/TBA Plant (08)

LyondellBasell broke ground on what will be the largest propylene oxide (PO) and tertiary butyl alcohol (TBA) plant ever built. The $2.4-B project represents the single-largest capital investment in the company’s history.

Revision Date:  9/18/2018

Tags:  325110 - Petrochemical Manufacturing ??????, LyondellBasell, Steel, Equipment, Cables, Concrete, Instruments, Piping, Project, Downstream, Investment, Construction, Processing Capacity, USA

Details on Existing Plants

Details on existing plants around the world are also provided.

Clinton, Iowa  With approximately 400 employees and contractors, and covering an area of almost 239 acres, the Clinton Complex is one of the largest chemical plants in Iowa. Using natural gas liquids as a feedstock, the plant manufactures ethylene  which is then converted into polyethylene plastic resins. 

Morris, Illinois:  Approximately 400 employees and contractors work on the site which covers an area of almost 700 acres. Using natural gas liquids as a feedstock, the plant manufactures ethylene, which is then converted into polyethylene plastic resins. 

Channelview, Texas: The  plant, about 20 miles east of downtown Houston, has been in operation  since 1957. Today, the Channelview Complex comprises an area of  3,900 acres with two large manufacturing facilities and a workforce of more than 2,000 people. Two olefin units at the north side facility manufacture ethylene, propylene, butadiene and benzene. The south side facility uses many of these products to produce propylene oxide, styrene monomer and other derivatives and gasoline-blending products.

The Most Profitable Markets Program aggregates information appearing in the databases and with total cost of ownership analyses of specific products produces forecasts of the Most Profitable Markets by individual prospect.

Details on the Most Profitable Market program are found at http://home.mcilvainecompany.com/index.php/component/content/article/30-general/1469-most-profitable-market-program

Details on the Oil, Gas, Refining, Petrochemicals  Markets, plants, and projects are found at http://home.mcilvainecompany.com/index.php/markets/28-energy/471-n049

Chemical, and other industrial plant activity is analyzed with  http://home.mcilvainecompany.com/index.php/databases/2-uncategorised/93-n032

The Program starts with Serviceable Obtainable Market Forecasts which are available for many CFT products. Details on each  are found at http://home.mcilvainecompany.com/index.php/markets

Bob McIlvaine can answer your questions on the programs. You can reach him at rmcilvaine@mcilvainecompany.com  847 784 0012 ex 122,  cell 847 226 2391

Treatment Chemicals Most Profitable Market Analyses based on Knowledge

The Most Profitable Markets for treatment chemicals are determined by gathering the large amount of relevant information.  The McIlvaine Water and Wastewater Treatment Chemicals report provides many thousands of forecasts for treatment chemicals for each application including the booming hydraulic fracturing and the smaller but significant manufactured frac sand plants. An intelligence system which is part of the report provides links to relevant knowledge.  Here are recent additions.

·        OTC-Chemicals  (Conference  Dated:  4/2/2019)

·        Many chemicals used in hydraulic fracturing  (Article  Dated:  3/28/2019)

·        Struvite in Municipal Wastewater plants and the role of magnesium hydroxide  (Article  Dated:  3/28/2019)

·        Magnesium Peroxide for hydraulic fracking  (Overview  Dated:  3/28/2019)

·        Martin Marietta is reliable source of MgO for U.S.  (Article  Dated:  3/28/2019)

·        Pinellas County solves H2S problem with magnesium hydroxide  (Article  Dated:  3/28/2019)

·        Magnesium hydroxide is effective on corrosion in sewer pipe corrosion control.  (Analysis  Dated:  3/28/2019)

·        Martin Marietta 2018 revenues were over $4.2 billion while earnings were close to $700 million  (Market  Dated:  3/28/2019)

·        Flocculants and Coagulants: The Keys to Water and Waste Management in Aggregate Production  (Overview  Dated:  3/27/2019)

·        Cost of recovering produced and flowback water  (Article  Dated:  3/27/2019)

·        Centralized Water-Management Facilities in the Piceance Basin  (Article  Dated:  3/27/2019)

·        CHEMTREAT CL25E Chlorine Dioxide and Acidified Chlorite Solution Precursor  (Overview  Dated:  3/27/2019)

·        Global Water Treatment Chemicals in Oil & Gas – 2018-23  (Market  Dated:  3/27/2019)

·        Nalco biocide outperforms glutaraldehyde in San Juan Basin fracking  (Overview  Dated:  3/27/2019)

·        Nalco friction reducer in proppant superior to guar  (Market  Dated:  3/27/2019)

·        Nalco has variety of chemicals for fracturing fluid  (Article  Dated:  3/27/2019)

·        Nalco biocide allows recycle of produced water in Fayetteville shale basin  (Article  Dated:  3/27/2019)

·        Streamline produced water treatment and use for fracking  (Overview  Dated:  3/26/2019)

·        Frac Water Recycling  (Article  Dated:  3/26/2019)

·        The EPA analysis of the hydraulic fracturing water cycle  (Report  Dated:  3/25/2019)

·        Black Sand recycles water  (Article  Dated:  3/14/2019)

·        If you think coal will come back in the U.S. read this  (Article  Dated:  3/13/2019)

·        Veolia supplies process system to Argentine lithium producer  (Presentation  Dated:  3/11/2019)

·        Lithium project in Chile is being fast tracked by Lithium Power International  (Presentation  Dated:  3/11/2019)

·        Monitoring Chemical Injection Systems by Dectechtion  (Article  Dated:  3/6/2019)

·        Holistic flotation approach for reagents and equipment  (Article  Dated:  2/20/2019)

For information on Most Profitable Market Program click on http://home.mcilvainecompany.com/index.php/component/content/article/30-general/1469-most-profitable-market-program

For information on the treatment chemicals market report click on http://home.mcilvainecompany.com/index.php/markets/27-water/449-n026-water-and-wastewater-treatment-chemicals

For more information contact Bob McIlvaine  rmcilvaine@mcilvainecompany.com  847 784 0012 ext. 122,  cell 847 226 2391