Mexichem, OxyChem partner for U.S. ethylene plant

Specialty chemicals maker Mexichem SAB de CV is partnering with U.S. Occidental Chemical Corp. (OxyChem) to build a US$1.5 billion ethylene plant at an OxyChem facility in Ingleside, Tex.

The plant should start operating in 2017, Mexico-based Mexichem said in a statement.

The existing OxyChem plant produces vinyl chloride monomer (VCM), chlorine, and caustic soda. The new 50-50 joint venture is called Ingleside Ethylene LLC.

Under a long-term supply relationship, the ethylene produced from the cracker will feed existing VCM manufacturing capacity. Mexichem will use the VCM to produce polyvinyl chloride (PVC) and PVC piping systems.

OxyChem, a wholly owned subsidiary of Occidental Petroleum Corp., will build and operate the cracker, which will take advantage of growing supplies of low-cost feedstock from shale gas development, Mexichem said.

Mexichem first announced it was considering building a Texas-based facility with Oxychem last year.