Badlands NGLs completed several important milestones in its development of a Gulf Coast merchant alpha olefins ("AO") manufacturing facility. The facility will manufacture the polyethylene co-monomers 1-butene and 1-hexene using a proprietary ethylene metathesis technology. The 1-butene product will be dimerized from ethylene and the 1-hexene will be trimerized from ethylene under a license agreement signed by Badlands. The newly announced facility is expected to begin operation in approximately 24 months and will have the ability to produce annual volumes of 93 KT of 1-butene and 141 KT of 1-hexene.
Most polyethylene co-monomer alpha olefin products are produced via an oligomerization process that produces a range of up to 14 different products, including 1-hexene and 1-butene, in set ratios. With the proprietary processes licensed by Badlands, the new facility will be able to produce 1-butene and 1-hexene on-purpose to meet demand without having to produce additional non-polyethylene co-monomer AO products.
Badlands is moving forward with an engineering, procurement and construction ("EPC") agreement, including guarantees of schedule and cost for the project, with S&B Engineers and Constructors ("S&B") of Houston, Texas. S&B has recent EPC experience with ethylene trimerization synthesis of 1-hexene. Badlands chose S&B after a competitive process.
S&B CEO Jimmy Slaughter commented, "We have been impressed with Badlands' development plans for this important facility and have close ties to the Badlands team. We were pleased to be chosen for this project and are committed to its success."
Badlands also announced that it has signed a 15-year product offtake agreement for 100% of the AO products produced by the new facility. Badlands' offtake partner is a major petrochemical and polymers industry marketer and offtaker and Badlands has maintained a longstanding relationship with its offtake partner.
At this time, Badlands continues to consider two alternative Gulf Coast sites for the project and expects final site selection in the next few weeks. Both sites are located on or adjacent to water transport of products thereby facilitating supply of Badlands AO products to both domestic and international customers.
Badlands has signed an agreement with an institutional investor in order to source all required project funding.
William Jeffrey Gilliam, CEO of Badlands, stated that, "the new Badlands AO facility will be the first merchant on purpose 1-butene and 1-hexene facility on the U.S. Gulf Coast. We look forward to working with our EPC, offtake and technology licensing partners as we complete this facility and begin to supply merchant AO products to the marketplace."
