Chevron Corporation CVX and Phillips 66’s PSX joint venture Chevron Phillips Chemical Company LLC has announced its decision to construct a petrochemical facility in collaboration with Qatar Petroleum.
The facility will process ethane into ethylene, with Qatar Petroleum expected to have a 70% interest in the venture. In the Middle East, the to-be-constructed complex will likely be the largest when it comes to producing ethylene by processing ethane. Notably, the major constituent for manufacturing plastic is ethylene.
With this transaction, Chevron Phillips Chemical will be helping Qatar Petroleum produce roughly 1.9 million tons of ethylene every year, said chief executive officer of Qatar Petroleum. Moreover, the completion of constructing the new plant, expected by 2025, will boost Qatar’s polyethylene production, added Qatar Petroleum.
Investors should know that the North Field will be the main source to ethane – which is a natural gas liquid and will be utilized as a feedstock to produce ethylene. Per media reports, the North Field of Qatar is the largest natural gas field in the globe.
The chief executive of Qatar Petroleum announced that billions of dollars will be required for the project but added that the estimated amount of the facility’s cost will be known once the engineering study gets completed.
With the expansion of operations in the Middle East for the world class project, Chevron Phillips Chemical added that it will be able to capitalize the mounting demand for petrochemical products across the world. Moreover, with the facility that will be created in the north of Doha, the project will gain access to plentiful amount of natural gas liquid that is being produced in Qatar. With the huge volumes of natural gas liquids, the feedstock to the ethane cracker will be priced competitively, added Chevron Phillips Chemical.
Headquartered in the Woodlands, TX, Chevron Phillips Chemical is equally owned by Chevron – an integrated energy major – and Phillips 66 – a leading player in refining, chemicals and midstream. While Phillips 66 carries a Zacks Rank #3 (Hold), Chevron has aZacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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