Make It Rain - Mexico's Drought Prompts Petrochemical Shutdowns

Thousands of unionized dockworkers walked off the job at ports along the U.S. East and Gulf coasts October 1 in the first work stoppage for those regions since 1977. Three days later, they’re heading back to work with a tentative deal on wages in hand and an agreement to continue negotiating on other issues through mid-January. The strike didn’t threaten liquid exports like crude oil and LNG but imports of action figures and exports of plastic pellets used to make them — as well as other dry containerized products and feedstocks — hit a brief standstill. In today’s RBN blog, we’ll examine the potential fallout avoided by the labor agreement.

Fast-rising NGL supplies during the early years of the Shale Era fueled excitement about the potential for new petrochemical plants in the U.S., especially ethane-only crackers to make ethylene and other byproducts, along with propane dehydrogenation (PDH) plants to make propylene. While 11 new ethane-fed crackers have come online in the U.S. since the mid-2010s and the world’s largest — Chevron Phillips Chemical and QatarEnergy’s 4.8-billion-lb/year facility — is under construction in Texas, only three of the many PDH projects proposed over the same period were actually built. In today’s RBN blog, we’ll look at why the initial rush of new PDH project announcements resulted in so few new U.S. plants.