INEOS Oligomers confirmed that it has made a Final Investment Decision (FID) to build a new world scale Linear Alpha Olefin (LAO) unit at the INEOS site at Chocolate Bayou, Texas, U.S.A. The LAO unit capacity will be 420,000 metric tonnes per annum (ktpa), 20% larger than when the project was originally announced.
The new unit represents a major step forward in the ambitious growth plans for the LAO business, complementing existing units in Joffre, Alberta, Canada and Feluy, Belgium respectively.
“We are now firmly in the implementation phase of our long term growth strategy for this key business,” said Bob Learman, INEOS Oligomers CEO. “The scale of this new capacity addition underlines our commitment to keep pace with our customers’ expanding need for these products.”
The Chocolate Bayou site boasts two world scale ethylene crackers and offers ready access to the U.S. Gulf Coast ethylene pipeline distribution network, and thus offers an excellent location for the new unit, said Peter Steylaerts, project general manager.
The new unit will be based on proprietary and differentiated INEOS Oligomers “broad-based” LAO technology. In addition, the new unit will also include process technology improvements that will reduce the plant’s variable costs.
Once the new unit comes on-stream in November 2018, the global LAO production capacity of INEOS Oligomers will reach approximately one million metric tonnes per annum.
“We continue to believe our market and technology focus, combined with our access to USGC ethylene economics, make this a very attractive opportunity. Hence, our ultimate decision to build a unit larger than the 350 ktpa originally envisioned and fully exploit available economies of scale,” said Joe Walton, INEOS Oligomers business director.
“We continue to see strong, above GDP, growth for LAO in the key markets we serve: polyethylene (PE) co-monomers, polyalphaolefin (PAO) lubricants and drilling fluids. Our new unit will be well placed to supply the significant new PE capacity being built on the Gulf Coast over the next several years. In addition, the unit will also provide the feedstock that will enable our long term PAO capacity growth to support the demand for high performance synthetic lubricants. For example, our new high viscosity PAO unit will come on-stream in 1Q 2017 and engineering has begun on a new world scale low viscosity PAO train. Furthermore, our LAO drilling fluids can be readily exported to offshore fields in the Gulf Coast, Caribbean and Latin America,” Walton said.