Oil And Chemical Companies Are Going To Slash Capex
Within the wake of the coronavirus and collapse in crude oil costs, chemical, and oil and fuel, and midstream corporations will all slash capital spending (capex) for development initiatives to protect money. In consequence, the US and international chemical funding waves seem to sluggish significantly within the years forward.
Whereas main US chemical tasks beneath building ought to proceed, the autumn in Brent crude oil costs and the shrinking of the Brent/US Henry Hub pure gasoline ratio from the 30s to the mid-teenagers “places into query the long economics run,” stated Kevin Swift, chief economist of the American Chemistry Council (ACC) talking on an ICIS webinar on the financial outlook on 19 March.
Nonetheless, on a 16 March look on CNBC’s Mad Money program with Jim Cramer, CEO Jim Fitterling stated the corporate would battle to fulfill even the lowered $1.5bn CAPEX goal due to limitations on the motion of contractors and engineers given the coronavirus outbreak.
On 18 March, Shell introduced the permanent nation suspension of labor on its 1.5m tonne/yr cracker below building in Monaca, Pennsylvania, to forestall the unfold of the coronavirus.
For Dow, after having paid down round $2bn in debt in 2019, it wishes to repay one other $500m-$1bn in debt in 2020, stated Fitterling. At the end of 2019, Dow had an internet debt of $14.6bn.
Dow is within the technique of beginning up to its Texas-9 cracker enlargement, including 500,000 tonnes/year of ethylene capability in Freeport by mid-Q2. Amongst different venture plans are a 130,000 tonne/year ethylene enlargement in Western Canada by H1 2021 and a 600,000 tonne/yr polyethylene (PE) plant on the US Gulf Coast for an H2 2022 begin-up.
Canada-based Methanex on 16 March stated it’s evaluating all capital and working spending, together with its deliberate Geismar three challenge in Louisiana, which might add 1.8m tonnes/year of methanol capability. Building on the plant began in late 2019 with deliberate begin-up for mid-2022.
In late January, Methanex introduced it was broadening its seek for a strategic accomplice for Geismar 3.