Phillips, Solvay Will Build World's Largest Slurry HDPE Plant

Phillips Petroleum Co. (Bartlesville, OK) and Solvay Polymers, Inc., a subsidiary of Solvay Group (Brussels, Belgium), have agreed in principle to build and operate a 700 million lb/y HDPE plant. The unit will be the largest slurry loop reactor in the world when it opens in 2002. Financial terms of the agreement were not disclosed.

The companies have not yet decided where to build the unit, but say it will go up at one of their existing US manufacturing sites. Phillips will supply the majority of the unit's ethylene feedstock from its Sweeny, TX, complex. Although Phillips and Solvay will each own 50% of the unit and share its output of general-purpose blow-molded HDPE, they will market their products independently.

HDPE is ubiquitous. Open the refrigerators of most US homes, for example, and they will contain HDPE milk inside. Phillips and Solvay plant to build a large slurry loop plant, realizing economies of scale neither would have achieved on its own.

The companies intend to build a second shared facility. They will locate the unit on a site belonging to the company not hosting the initial plant. They expect to start the unit during the 2005-2007 time period, as market conditions dictate.

During the past 20 years, most new HDPE have used gas-phase technology. Gas-phase units often have superior process economics, as well as the flexibility to make both HDPE and linear LDPE (LLDPE). Most slurry loop plants tend to be small, though both Phillips (in Pasadena, TX) and Solvay (in Deer Park, TX) operate large units with 1.5-2.0 billion lb/y capacity. The shared unit allows the company to build a bigger, more economic unit than they might have undertaken individually.

"This world-class plant will give us economies of scale that would not have been obtainable from a smaller facility," says Phillips chemicals and plastics SVP Jim Gallogly.

"This is a new model for our industry," says Solvay Polymers president David Birney. "We needed an innovative and cost-effective way to meet the market's demand for more product. By joining forces, Solvay Polymers and Phillips will be able to accomplish this goal."

Solvay has been aggressively pursuing ways to diversify its geographical base while pushing down costs in its HDPE/LDPE and PVC businesses. In 1998, it formed an alliance with Italy's PetroFina SA (Fina) that had several features in common with the one it just signed with Phillips. Solvay and Fina agreed to share output from two 550 million lb/y plants they planned to open in Belgium in 2002 and 2005. The companies would each own and operate one plant.

Fina also agreed to license its metallocene HDPE production technology to Solvay. Solvay, in turn, would license Fina to use its chromium catalyst technology.

HDPE is used primarily to make bottles, packaging, gas tanks and other car accessories, and high-pressure of gas and water distribution pipe. Global demand continues to rise about 5%/y.

For more information: Jim Gallogly, SVP, Chemicals and Plastics, Phillips Petroleum Co., Phillips Bldg., Bartlesville, OK 74004. Phone: 918-661-6600. Fax: 918-661-6279.

Or: David Birney, President, Solvay Polymers, Inc., PO Box 27328, 3333 Richmond Ave., Houston, TX 77098. Phone: 713-525-4000. Fax: 713-522-2435.

By Alan S. Brown