Numerous new projects have been heralded by petrochemical firms in recent years to build and expand on a stable supply of natural gas and ethane from their shale-advantaged capacity in the U.S.

While many companies elected to construct facilities from scratch, Houston-based LyondellBasell Industries chose to update and restart a plant it idled nearly a decade ago.

The U.S. chemical giant on January 2 announced that its methanol unit in Channelview, Texas – about eight miles east of downtown Houston – had restarted in the fourth quarter of 2013.

LyondellBasell is seeking to capitalize on abundant, low-cost feedstock natural gas for its basic petrochemical building block and gasoline-blendstock production. And the methanol-unit restart is just the first of many expansion and debottlenecking projects the company is planning.

LyondellBasell closed the 260,000-gallon methanol unit in 2004 because of the then-high cost of natural gas – the main feedstock for North American methanol producers. By the end of 2005, U.S. natural gas prices had jumped above $15 per million British thermal units (mmBtu), Energy Information Administration data shows.

Since then; however, the economics have changed dramatically. NYMEX-traded natural gas for February delivery settled at $4.299 per mmBtu on January 7.

In a recent interview with Hart Energy’s Global Refining & Fuels Today, LyondellBasell spokesman David A. Harpole said with the lower natural gas prices in North America, restarting the mothballed methanol plant could be done at a fraction of the cost of building a new unit.

“Methanol is produced with natural gas as the primary feedstock, and with the low-cost of natural gas available to us now through the more abundant supplies from shale formations – particularly those in South Texas [Eagle Ford] – it gives us an incentive to put this plant back into service,” Harpole said.

“It [the Channelview methanol unit] had been taken out of service in approximately 2004 when natural gas prices were considerably higher than they are today, and it made the plant uneconomic on a global-scale,” he noted. “With the ability to utilize the low-cost natural gas now, that will make this unit competitive on a global-scale for producing methanol for our uses and for other consumer uses.”

“We’re the largest producer of MTBE [methyl tertiary butyl ether] globally, and so that has been a component of this business for us,” Harpole said. “Certainly MTBE or direct-blending of methanol offers one of the fuel opportunities for methanol. We also have a fairly sizable acetic-acid business, and methanol is one of the components of acetic acid as well. So those are at least two of the internal drivers that we see.”

And the gamut doesn’t stop there.

In a recent company statement, Patrick Quarles, senior vice president of intermediates and derivatives at LyondellBasell, said the producer has several projects planned on the Gulf Coast to take advantage of burgeoning natural gas supplies.

Instead of building new facilities to tap into the shale-advantaged resources, LyondellBasell opted to proceed with debottleneck projects and expand production capacity at its existing units to “get that capacity into service quicker, while the markets are strong and take advantage of the opportunity that’s before us,” Harpole said. “It’s just adding capacity to an already-strong system that we have in place.”

LyondellBasell also has additional ethylene capacity totaling 1.8 billion pounds slated to go online over the next couple of years. According to Harpole, an expansion at the company’s LaPorte, Texas, facility is scheduled to ramp up by the end of this year. Additional upgrades at the Channelview plant will go online in 2015, and production at a Corpus Christi, Texas, unit is scheduled to start in late 2015.

Yet another derivatives project along the ethylene chain is on the table for LyondellBasell, Harpole noted.
“That’s a debottleneck that we’re doing at Matagorda [County] that will add 200 million pounds of high-density polyethylene [HDPE],” he said. “We haven’t been specific about that [the start-up date], but when we’re ready to announce that it’s in-service, we’ll do that. We haven’t tried to project a date on that at this point.”

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