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# OAR Box 1872

Prepped by Keeia Richards



## Document

Number: 

# 31)11-1-8 0

Docket Number: 

# A-90-1 9

Printed 11/26/2008 8:51:50 AM Sheet 31 of 204P. 2

f '« * F E B 2 7 '9 1 09:5 5 RADIA N CORP . HIP , N C 

## (litmUmUPi^tHcUS^mWfUU JANUAR Y 199

0 Pttnioiut«port

—Septembe r 198 8 H a 

# A-90-1 9

il l 

# 8 0

ETHYLEN E

FOCUS....Ethylen e i e the bssi e petrochemica l buildin g bloc k for polymer s includin g plsstics , fiber s and elastomers . Principa l derivative s includ e polyethylene , ethylen e oxide/glycol , ethylen e dichloride , ethylbenzene/etyrene , an d linea r alcohols . U S ethylen e outpu t wa s jus t unde r 3 8 billio npound s i n 1989 , a new record . Import s fro m Cenad a wer e minimal . Exports , a s ethylen e itself , ar e negligible . Althoug hU S demandwa s stron g i n the worl dpetrochemica l boo m o f 198 8 an

d int o 1989 , mos t derivative s ar e mature . U S export s o f ethylen e derivative s continu e t o contribut e t o highU S ethylen e demand . U S ethylen e equivalen t export s (ne t o f equivalen t imports ) wer e 2. 1 en d 3.4 ' billio npound s i n198 8 and 1989 , respectively . OUTLOOK....U S ethylen e consumptio ngrew at les s tha n1 5 annuall y betwee n198 0 an d 1984 , durin g the pro tracte dU S petrochemica l industry slump . Betwee n198 5 an d 1988 , annua l growt hwa s ove r 7S , bu t fel l t o 2 5 for 1989 . Futur e domesti c demandgrowt hwil l probabl y averag e 2 5 pe r year . A s oversee s competitio ninten

sifies , export s o f U S ethylen e derivative s wil l decline . Lo w cos t producer s o f derivative s i n th e Middl e Eas t en d elsewher e wil l penetrat e worl dmarket s for polyethylene , ethylen e glycol , viny l chlorid e and styrene , amon g others . Competitio nin U S market s fro m import s o f derivative s fro m thes e offshore , lo

w cos t producer s els o wil l intensify . Uiil e th e U S ethylen e supply/demandbalanc e i e currentl y enug , expansion s ar e expecte dt o kee pcapacit y wel l ahea do f demandfo r th e foraeeabl e future . PRICING....Th e actua l pric e or valu e o f ethylen e depend s o na combinatio no f feedstoc k value s en d deriva

tive demand . Th e highl y captiv e natur e o f demandplace s the profi t burde no nderivativ e pricin g en d ra w materia l cost s rathe r tha nthe marke t valu e fo r ethylene . Afte r severa l year a o f depresse dpricin g i n the earl y 1980'a , ethylen e price s eacelate dt o abou t 3 2 cent s i n198 8 a s shortage s develope dan d feedstoc k value s increased . Price s retreate dint o the 24-2 7 cent s pe r poundrang e i n198 9 a s deman dbega nt o eas e andfeedstoc k value s decreased . I n today' s market , feedstoc k availabilit y i s key . Th e nee dt o maximiz e ethylen e yield a explain s wh y producer s pa

y a premiu

m for pur e ethane . Inth e future , lowe r coat , readil y availabl e butan e may become a feedstoc k o f choic e a s highoctan e butan e i s remove dfro m gasolin e t o lowe r volatility . Ethylen e price s er e expecte dt o continu e fallin g i nth e year s ahea da s new capacit y

become s operational . Some trad e analyst s anticipat e tha t price s coul ddro pfro m today' s 2 4 cent s t o e s lo w a s 1 8 cent s a poundan

dremai ndepresse dfor anothe r five yeara . 

# tftf P
- .Silty AVERAG E PRIC E RANG E - ETHYLEN E Cent s Pe r Pound

Trad e Lis t Avg . Sale s ••• * ««•••••«•«•• • HISTORICAL

196 0 196 5 197 0 197 5 198 0 

### ~ T " 5775 " 372 7 TI77 5 1575 " 5 4. 0 3. 1 8. 8 22. 0 198 5 

### 157 5 1 6 198 6 

### 15.0 5 1 4 1987 TB7T 7 1 4 198 8 

### ~TT 2 5 *•* PROJECTE D *•• • 198 9 199 0 1992 

### * M.ZH-K- ~re~ * 2 8

Capacit y Productio n Import s Deman d 196 0

cSTTT J 5.5 0 5.5 0 196 5

11.4 0 9.6 0 9.6 0 197 0 2uV8 0 18.1 0 18.1 0 197 5 198 0

2S70 O 5072 0 20.5 0 28.6 7

.2 7 20.5 0 28.9 4 198 5

35.2 0 29.8 5 .2 3 30.0 8 198 6

35.0 0 32.8 6 .2 9 33.1 5 198 7

3670 0 34.9 5 .0 2 34.9 7 198 8

T775 4 37.2 0 .1 0 37.3 0 198 9
* 39. 2

•37. 8

•. 2

•38. 0 Trad e lis t price s ar e generall y yea r en

d lo w contrac t prices . SUPPL YM O DEMAND....Billion s o f Pounds....Estimated....Domesti c U S

PROJECTE D ••• • 199 0 199 2 4"07 0

38. 7 41. 1

AVAILABILITY....A s ethylen e shortage s becam e widesprea di n1988 , severa l U S producer s mad e plan s t o add capacity. ' Expansion s underwa y includ e debottlenecking s a s wel l a s constructio no f th e firs t worl dclas s gras s root s plant s planne ddurin g the 1980's . Phillip s i s buildin g a 1. 5 billio npoun duni t a t Sweeny , T X tha t wil l us e natura l ge s liqui d(NGL ) fee den dbe o nstrea

m i n1991 , sn d Quantum Chemica l 1 6 buildin g a 1. 5 billio npoundfacilit y a t Dee r Park , T

Xb y 199 1 tha t wil l als o us e NGL feed . Formos a Plestic a plan s a 1. 5 billio npoundplan t a t Por t Lsvece , TXfo r 199 1 startup , bu t thi s projec t wil l be delaye det leas t on e year . Uestlak e Polymer s Corp . plan s a 1. 0 billio npoundplan t for 199 1 startu pt o suppl y ra w material s t o a polyethylen e plan t at Lak e Charles , LA . Do w ma y ad d 1. 5 billio npound s a t Freeport , T Xb y 1992 . Occiden

ta l Petrochemica l (Cain ) ma y als o buil da 1. 0 billio npoundplan t onth e Gul f Coas t by 1992/1993 . Some majo r planne dexpansion s ma y be delaye do r abandone di f marke t condition s an d profi t projection e deteriorate . I

n additio nt o majo r expansions , i t i s ofte npossibl e t o incrementall y expendexistin g unit s b y 10 0 t o 20 0 millio npound s pe r yea r wit honl y moderat e capita l riak . Incrementa l expansion s ar e instal

le dquit e rapidl y

an d therefor e ce n reduc e a producer s exposur e t o demandgrowt hfluctuations . Becaus e o f economics , petroleu m refiner s er e recoverin g mor e hydrocarbons , includin g ethylen e end propylene , fro

m refiner y

off-ga s streams . Abou t 1 billio npound s o f ethylen e pe r yea r i s no w mad e fro

m off-gss . Javelina , a partnershi pamong subsidiarie s o f Coasta l Corp. , Kerr-HcCe e Corp. , an d Valer o Energy Corp . wil l b e o

n strea m i n mid-199 0 wit hs majo r off-ga s processin g plan t a t Corpu s Christi , TX . Ethylene , propylene , an

d othe r hydrocarbon s fro m nearb y refinerie s wil l b

e recovered . I nCaned8 , Polysar , Ltd. , no w per t o f Nova Corp. , i a increasing , olefin s capacit y a t it s Corunn e plen t nea r Sarnia , Ontari o t o ove r 1. 2 billio npound s i nearl y 1990 . Polysa r currentl y make s abou t 90 0 millio n pound s a yea r o f ethylen e et it e Corunn a site . Onc e th e expansion/debottleneckin g i s complete , Nova Corp.' s tota l ethylen e capacit y wilL,excee d4 billio npounds . Nov a currentl y produce s ethylen e fro m tw o 1. 5 billio npoun dcracker s at Joffre , Alberta . A t For t Saskatchewan , Alberta , Dow i e expecte dt o buil da 1.0-1. 5 billio npoundplan t b y 1992 . Dow

Canad a currentl y

purchase s abou t 1. 8 billio npound s o r ethylen e fro m Nova . A

t Taylor , BC , Westcosat , i npartnershi pwit hTaiwanes e companies , he s plan s fo r 75 0 millio n pound s b y 1992 . bu t industry

observer s give thi a projec t littl e chanc e for success . 8/8 7P. 3P. 4

FE B 2 7 '9 1 09=5 6 RADIA N CORP . RTP , N C

PRODUCER S AND CAPACITIE S - ETHYLEN E - MILLION S Q F POUND S PE RYEA

R P. 7

. PRODUCE R Amoc o Chevro n Chevro n Do w Chemica l Do w Chemica l DuPon t Exxo n Exxo n Goodric h Lyondel l Petrochemica l Co . Mobi l Chemica l MoUi l Chemica l Occidente l Petrochemica l (Cain ) Occidenta l Petrochemica l (Cain ) Occidenta l Petrochemica l (Cain ) Oli n Phillip s Rexen e (formerl y

E l Paso ) Shel l Shel l Su n Texac o Texac o Texa s Eastma n Unio nCarbid e Unio nCarbid e Unio nCarbid e Unio nTexas , BASF , Borg-Warne r US I (Quantum ) U5 I (Quantum ) US I (Quantum ) Vist a LOCATION Alvin , TX Ceda r Bayou , T

X Por t Arthur , T

X Freeport , T

X Plaquemine , L

A Orenge , T

X Bato nRouge , LA Ba y town , T X Calver t City , K

Y Channelview , TX Beaumont , T

X Houston , T

X Chocolat e Bayou , TX Corpu s Christi , T

X Lak e Charles , L

A Brandenburg , K

Y Sweeny , TX Odessa , T

X Dee r Park , T

X Norco , L

A Claymont , D E Por t Arthur , TX Por t Neches , T

X Longview , TX Seadrift , T

X Teft , L A Texa s City , T

X Geismar , L

A Clinton , I

A Eas t Morris , I L Tuscola , I

L Lak e Charles , LA

TOTAL 198 9 CAPACIT Y 

### 215 3 120 0 100 0 195 0 230 0 100 0 170 0 170 0 35 0 340 0 110 0 50 0 110 0 160 0 70 0 10 0 250 0 57 0 179 0 224 0 25 0 115 0 37 5 140 0 82 0 119 0 125 0 79 0 80 0 97 5 40 0 70 0 39,18 0 Oli nrestarte d th e Brandenburg , KYunit , idle d i n1986 . I n1987 , Su nRefinin g an d Marketin g bough t Oli nCorporation' s 50 5 shar e o f th e Su nOli nDelawar e join t venture . I nearl y 1988 , Mobi l Chemica l purchase d Aristec hChemical' s 50 0 millio npound plan t et Houston . I nearl y 198 9 Carbid e restarte d 45 0 millio npound s o f Taft , LA capacit y

tha t wa s shu t dow

nin1979 , increasin g Tef t t o 1,19 0 millio npounds . Phillip s debottlenecke d b y 20 0 millio npound s i n1989 . Lyondell , no w a publi c corporatio nwit hles s tha n50 5 ownershi p b y Arc o Petroleum , expande d Channelview b y 60 0 millio nlbs . i n1989 . Afte r numerou s debottleneckin g steps , Lyondell' s tota l capacit y i e no w believe d t o b e 3. 4 billio npounds . Vist a wil l expand b

y 30 0 millio nlbs . t o on e billio npound s i n1990 . Occidenta l (formerl y Cai nChemical ) expande d at Lak e Charles , L

A t o 70 0 millio npounds . Cei na t Chocolat e Bayo u wa s previousl y DuPon t snd the 1 Co t p u 6 Christ i plan t wa s owne d b y Corpu s Christ i Petrochemica l Co . Unio nTexa s (wit ha 42 5 interest ) Operate s the facilit y

owne d jointl y

wit hBAS F an

d G E Plastic s - whic hwil l b e expande d t o 1. 1 billio nlb s by 1991 . Koc hIndustries ha s 2 5 millio nlbs . o f ethylen e capacit y at Corpu s Chri6t i fro m refiner y

off-ges .

EN D USES..,.Ethylene , ethene , i s a nunsaturate d hydrocarbo nwhic hform s a variet y o f polymers . Majo r derivative s includ e low
- an d high-densit y

polyethylene , ethylen e oxide , ethylen e dichloride , ethylbenzene , linea r alcohols , viny l acetate , an d ethy l alcohol . Othe r use s includ e ethylene-propylen e elastomers , ethy l chloride , an

d ethylen e dibromide . Mino r application s includ e spee d ripenin g an d colorin g o f fruits .

DERIVATIV E PERCEN T Polyethylen e - LDALTTT 7 Polyethylen e - H D 2 5 Ethylen e Oxid e 1 4 EN D US E PATTERN - 198 9 ESTIMAT E

DERIVATIV E PERCEN T DERIVATIV E PERCEN T Ethylen e Dichlorid e I T Viny l Acetat e 2 Ethylbenzen e 7 Miscellaneou s 6 Linea r Alcohol s 6 MANUFACTURING....Ethylene , an d olefini c an

d aromati c coproducte , ar e mainl y produce d b

y stea m pyrolysi s o f gaseou s sn

d liqui d hydrocerbons , rangin g fro m ethan e t o vacuu

m ga 6 oils . Smal l quantitie s o f ethylen e ar e als o recovere d fro

m refiner y

streams . Inpyrolysi s furneces , feedstock , combine d wit hsteam , i s subjecte d t o hig htemperatur e crackin g t o mak e olefini c ric hgas . Resultan t product s er e quenche d i nexchanger s tha t generat e steam . Afte r quenching , liquid s ar e remove d b y fractionation . Coole d gase s ar e compressed , dried , an d sen t t o the demethanizer . Bottom s g o t o the deethsnizer . Acetylen e i s removed . Th e ethylene-ethen e strea m i s fractionated , an d ethan e fro

m th e botto m o f th e ethylen e fractionato r i s recycle d t o pyrolysis . Yield s depen d onseverit y o f crackin g an

d typ e o f feedstock . Naphtha , propan e an d butan e hav e e smelle r yiel d o f ethylen e ths nethan e an d produc e large r yield s o f propylene , butadien e an d benzene . Pur e ethen e ca nproduc e 9 7 lb/bb l o f ethylen e vs . 7 8 lb/bb l naphtha , 7 3 lb/bb l propan e and 6 7 lb/bb l ga s oil . Ethan e may yiel d 84. 0 wt S ethylen e and 1.4 5 propylene . Full-rang e naphth a may yiel d 34.4 5 ethylen e en d 14.4 5 propylene . Improve d processe s exten d the rang e o f feedstock s tha t ca nb e used .
ENVIRONMENTAL ASPECTS.. . .Ethylene , a coforles s gas.a t atmospheri c pressure , i s a nanesthetic . I nhig h concentrations , i t i s a simpl e asphyxian t withou t othe r significan t physiologi c effects . Ethylene , a flammabl e gas , present s a nexplosio nhazar d whic hshoul d b e considere d whe nsettin g exposur e limits .

T o th e bes t o f ou r knowledge , the informatio ncontaine d herei ni s accurate . However , w e d o not assume an

y liabilit y

whatsoeve r fo

r the completenes s or accurac y o f thi s report .