CP Chem sees final investment decisions on cracker projects: Phillips 66 CEO

Chevron Phillips Chemical will make a final investment decision on a new cracker in far southeast Texas in 2022, followed by an FID in 2023 on an $8 billion joint venture petrochemical complex along the US Gulf Coast in 2023, Phillips 66 CEO Greg Garland said Aug. 3.

An analyst asked during Phillips 66's second-quarter earnings call about the status of the projects, each of which include a new cracker.

He said during the company's Q2 2021 earnings call that CP Chem was "looking at FID next year" for a possible new cracker on the US Gulf Coast, "and the Qatar project is about a year behind that."

Garland said market fundamentals have "improved dramatically" since the company initiated the projects in 2019, and it would take about four years from FID to startup.

"We've got our foot forward on these," he said. "We are ready to move, and we're working with contractors to make sure that we're getting the capital costs right."

While global markets are seen improving after coronavirus' worst effects in 2020, Garland noted some disruption remains in the world economy. The delta variant's spread has increased uncertainty amid uneven vaccination rates worldwide.

"We'd like to see a little clearer path to a fully resolved economic recovery from COVID. Get the delta variant and any other variants behind us," Garland said. "But we are leaning in and ready to move with FID on that project next year."

The potential southeastern Texas cracker project, with at least one derivative unit, has an estimated cost of $2.9 billion, according to documents dated December 2018 that were made public by the Texas Comptroller's Office in January 2019.

The documents did not reveal capacities for the plants or further details but noted that the company was evaluating other proposed sites in Texas and Louisiana.

The CP Chem and Qatar Petroleum in July 2019 announced plans to build their $8 billion joint venture on the US Gulf Coast, without further specifying a location. That project's proposed 2 million mt/year cracker would be one of the two largest crackers in the world, along with Dow Chemical's 2 million mt/year facility at its Freeport, Texas, complex.

The complex also would, as proposed, including two 1 million mt/year high-density polyethylene plants.

CP Chem and Qatar Petroleum announced the joint project in July 2019. It would include a 2 million mt/year cracker and two 1 million mt/year high-density polyethylene plants.

Phillips 66 in July 2020 announced that FID on the joint venture was deferred from 2021, but did not specify a new FID target date at that time.

CP Chem is a joint venture of Phillips 66 and Chevron.