Plastic polymer granules.

To say that the fracking boom in North America made a significant impact on the global oil market is an understatement, at the very least. But a historic low in oil prices may only be the beginning.

The Chicago Bridge & Iron Company (CB&I)—which ironically isn’t in Chicago, doesn’t build bridges or use iron—recently announced receipt of a $1.3 billion contract to provide engineering, procurement, fabrication and construction for a major ethane cracking project in Louisiana.

The LACC Ethane Cracker Project is a joint venture between Lotte Chemical and Axiall Corporation. Once completed, the cracker will be capable of producing up to one million metric tons of ethylene annually.

According to their corporate website, CB&I already services over 120 ethylene plants worldwide, collectively accounting for roughly 40% of the world’s ethylene production.

How Ethane Cracking Works

Process Flow Diagram for Ethane Cracking. (Image courtesy of CB&I.)

In ethane cracking, fresh feedstock and recycled ethane are thermally cracked in the presence of steam in a bank of pyrolysis furnaces. Olefin-bearing effluent gas is quenched progressively by the steam and through direct contact with oil or water. Polymer-grade ethylene is then recovered under cryogenic conditions in refrigerated fractionation systems.

The LACC plant will employ CB&I’s patented short residence time (SRT) pyrolysis heaters, which are designed to efficiently process feedstocks ranging from ethane to vacuum gasoil. In addition, the plant’s recovery section will incorporate a low-pressure chilling train operating at less than half the pressure of a conventional flow scheme.

More Petrochemical Production Coming to Louisiana

In addition to their EPC contract for the ethane cracker, CB&I also announced that it has been awarded a $365 million contract by Lotte Chemical to provide construction services for a monoethylene glycol (MEG) facility located adjacent to the ethane cracker.

"This project is the second of two important petrochemical initiatives Lotte Chemical is developing in the region, and CB&I is pleased to have been selected for both projects," said Philip K. Asherman, CB&I's president and chief executive officer.

MEG is an important chemical precursor in a number of industrial applications, the most common being the manufacture of polyester (PET) resins, films and fibers. It is also used in the production of antifreezes and coolants.

US Domestic Plastic Production?

Many US chemical manufacturers that were struggling a decade ago are now thriving thanks to the diminished cost of natural gas. Companies that once focused on diversifying their business away from producing bulk chemicals, like ethylene, are now finding success in bulk manufacturing.

Ethylene itself is perhaps the most important raw material in the petrochemical industry. It is the basis of the three polyethylene (PE) plastics: high-density PE, linear low-density PE and low-density PE. Used primarily in packaging, polyethylene is the most common plastic in the world.

Hence, a major investment in domestic ethylene production suggests that big changes could be coming to the North American plastics industry. The combination of low-cost feedstocks and major domestic projects like those above could significantly reduce the price of polyethylene and polyester in North America.

For more information, visit CB&I’s website.