Chevron Phillips, Qatar Petroleum sign $8 billion petrochemical deal
In their second major deal in the past few weeks, the two companies have agreed to jointly pursue development of a new petrochemical plant in the Gulf Coast region of the U.S.
Chevron Phillips Chemical and Qatar Petroleum have struck their second major deal in the last few weeks, signing an agreement to develop an US$8 billion petrochemical plant along the U.S. Gulf Coast.
The U.S. Gulf Coast II Petrochemical Project (USGC II) will include a 2,000 kilotons per year (KTA) ethylene cracker and two 1,000 KTA polyethylene units. The plant will mostly make hard plastics for everything from pill bottles to coolers to kayaks.
The deal was signed on July 9 at the White House in the presence of President Trump and Qatar’s ruling emir, Sheikh Tamim bin Hamad al-Thani.
Despite the signing of the deal, a final investment decision still must be made by the end of 2021. If the project does move forward, production is expected to begin in 2024.
The agreement will make Chevron Phillips Chemical majority owner – at 51 per cent – with Qatar Petroleum owning the remaining 49 per cent of the project. Chevron Phillips Chemical would provide project management and oversight and be responsible for the operation and management of the facility, said the press release. The preliminary cost of USGC II is estimated to be approximately US$8 billion.
At peak construction, USGC II would support an estimated 9,000 construction jobs, and approximately 600 full-time positions will be created once the facility is operational. The site will be located in the Gulf Coast region with direct access to the significant shale natural gas liquid reserves of the Permian Basin.
This new deal comes on the heels of a deal struck by the two companies last month to build a petrochemical plant north of Doha, Qatar that will come on line by 2025 and produce ethylene and high-density polyethylene.