Now that the world has returned to relative normalcy following the various challenges of the past few years, investment projects of all sizes have reappeared on energy leaders’ to-do lists.
It’s no surprise that Chevron Phillips (CPChem) “has a lot of activity going on now,” according to Gary Dellesky, the company’s general manager of global procurement. “We have two mega projects and multi-billion dollar investments planned, with the first, an ethylene cracker and derivatives facility, in the Gulf Coast area.” CPChem is predicting more than 500 full time jobs and thousands of construction jobs over the next couple of years, he added.
O&G procurement pros discuss upcoming projects, large and small
From left are Jeremy Osterberger with BIC Alliance, Leonardo ChinFong with Chevron, Gary Dellesky with CPChem, Rohan Dubal with Dow and David Alexander with Kuraray.
“We also have several mid-cap projects underway. There’s a C3 splitter in Baytown, and there’s also a world-scale 1-hexene facility in Old Ocean, Texas, near our Sweeny facility,” Dellesky said. “We have turnarounds that go on almost all the time.”
David Alexander, procurement manager for Kuraray, said his company experiences “constant, ongoing planned outages and turnarounds.” This includes Kuraray’s LaPorte, Texas, facility, which has plans for some operational reliability projects, he said.
“There are quite a few capital planning studies going on with a lot of upgrades to help improve operations,” he said. “And there are some larger projects that are still in the feasibility stage.”
Leonardo ChinFong, supply chain manager for Chevron’s Pasadena refinery, expects 2023 to be an exciting year, “because we have a big project happening in the refinery called light tight oil (LTO).”
“Capacity is going to increase a little bit, but the focus is going to be on making sure we can maximize the value chain throughout,” ChinFong said as a panelist at the Industrial Procurement Forum held recently in Pasadena, Texas.
ChinFong said Chevron plans to announce smaller turnarounds in 2023, but also has a major one coming up in 2024. He expects contracts for work activity will be heavy in the coming two years, in preparation for that project.
“Some of the contractors are already onsite, making sure everything is safe to start construction,” he said. “Our goal is to modernize the refinery to make sure we have the latest equipment and technology for a safe operating environment, and make sure we can handle all the different feedstocks.”
Rohan Dubal, strategic sourcing director of global purchasing for Dow Chemical, noted that turnarounds have dominated the conversation in 2022. “We will move forward, globally, with turnarounds in 2023, as well,” said Dubal, adding that one is in the Saskatchewan region of Canada, and the other is based in the Netherlands.
“They’re not the ‘mega projects’ that we’ve seen here in the Gulf Coast, but we spent approximately $6 billion in this region over the last six or seven years, building on what we have.”
Dow is also set to begin a project very soon in Seadrift, Texas, Dubal said. “It’s a medium-sized project, as we call it, and it falls somewhere in the $300 to $400 million range,” he said. “The fun part about the Seadrift unit is that the production is already sold for the next 10 years. We need to have that up and running by 2025.”
Dubal said a number of low/medium sized projects will also occur mainly between Louisiana and Texas, with “some smaller projects going on in Deer Park and in LaPorte, as well.”
Additionally, Dubal said, “most of the purchases are done” for Dow’s $119 million Plaquemine, La., project that will expand its production of propylene. “As we go into these mega projects and the construction for those, we want to make sure we are ready,” Dubal concluded.
