Chevron Phillips Chemical Company LP, a joint venture (JV) between Chevron Corporation (CVX - Free Report) and Phillips 66 (PSX - Free Report) , recently announced that it is ready to put its new ethane cracker located at its Cedar Bayou facility in Baytown, TX to work, which got delayed due to the Hurricane Harvey. The company launched feedstock and started operations at the new cracker, which was primarily scheduled to come online during the 2017-end.
Per the company, the new facility, one of the most energy efficient crackers, has a production capacity of 1.5 million metric tons per annum. The new ethane cracker's construction was started in 2014 and its completion marks the finishing of the final phase of the company’s $6 billion U.S. Gulf Coast petrochemicals project. The facility is expected to increase the company’s U.S. ethylene and polyethylene production capacity by 40%.
The facility is expected to benefit the company with its ethylene and polyethylene production, which is currently facing a rising global demand. The ethylene will be used to produce goods like containers, pipes, films and others. The company's high-quality products will reach its clients in the United States and rest of the world.
The increased natural gas production in the United States, which primarily originated from shale basins, is expected to support the new facility by churning out plentiful ethane at low cost. Moreover, the produced ethylene from the new facility will also support the company’s derivative units' output. The units include the company's Old Ocean facility near Sweeny, where two new polyethylene units began operations in last September.
The new facility from Chevron Phillips Chemical started ahead of ExxonMobil Corporation’s (XOM - Free Report) under-construction ethane cracker in Baytown. ExxonMobil's ethane cracker is expected to start production in the April-June quarter this year.
About Chevron Phillips Chemical and Zacks Rank
Chevron Phillips Chemical is a 50-50 partnership between Chevron and Phillips, both carrying a Zacks Rank #3 (Hold). Chevron Phillips Chemical, through its subsidiaries, owns $16.5 billion worth of assets that incorporate 33 manufacturing and research facilities. It has a stronghold in the worldwide petrochemical industry. The company has around 5,000 employees and is headquartered in The Woodlands, TX.
A better-ranked stock in the oil and energy sector is ConocoPhillips (COP - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Houston, TX-based ConocoPhillips is an upstream energy player. Its revenues for first-quarter 2018 are anticipated to improve 9.6% from the prior-year quarter. The company witnessed a positive average earnings surprise of 144.5% in the trailing four quarters.
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