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Keeps Gettin' Better - Stars Aligning as Gulf Coast Ethylene-to-Alkylate Project Advances

The thinking behind Next Wave Energy Partners’ late-2019 decision to build a first-of-its-kind ethylene-to-alkylate plant was that a combination of NGL production growth and new ethylene supply — plus increasing demand for alkylate, an octane-boosting gasoline blendstock — would be a win-win-win for ethylene producers, refiners and Next Wave itself. Now, with construction of the plant along the Houston Ship Channel approaching the homestretch, things are shaking out very much as the company had anticipated — even better, in fact. In today’s RBN blog, we discuss the progress being made on Next Wave’s Project Traveler plant and the market forces validating the company’s final investment decision (FID).

Who among us didn’t make plans in late 2019 and early 2020 that didn’t pan out. Trips to the beach, to the mountains, to Europe. Family get-togethers and weddings. Plans to start new businesses, change jobs or retire. No, COVID reared its ugly head, and wreaked all kinds of havoc (beyond the obvious and sad human toll). The stock market crashed, and so did crude oil prices. Demand for gasoline, diesel and jet fuel tanked, and E&Ps, refiners and petrochemical companies tore up and threw out their 2020 and 2021 playbooks. More shocks followed, especially Russia's February 2022 invasion of Ukraine, which sent crude oil, natural gas and refined-product prices skyward and helped spur a round of inflation the likes of which we haven’t seen since the 1970s. And now there’s talk of a recession too.

After all the shocks and dislocations of the past two-and-a-half years, however, at least one of the plans made in the months before COVID did come to pass. Or, to put it more accurately, the project we’ll discuss in today’s blog is well on its way to becoming a reality, and the late-2019 rationale behind its owner's FID hasn’t just held up, it’s proved to be prescient.

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