INEOS and Chevron are Planning to Expand PAO Capacity Amid Growing Demand

  • 6-Oct-2022
  • Journalist: Jaideep

Polyalphaolefin (PAO) prices in the European market are forecasted to increase due to rising demand from the Electric vehicle (EV) sector. EVs are gaining popularity in Europe and North America, and it is pretty evident that petroleum-powered sales are constantly diminishing in several European and American markets, but EV sales have been overwhelmingly positive. On average, EVs require more lubricants than traditional automotive; therefore, the rise in EV sales increases demand for lubricants like PAO in European and American markets.

The anticipated rise in demand has contributed to several large manufacturers of PAO, like INEOS and Chevron Phillips Chemical, increasing the capacities of their manufacturing units. The startup of INEOS Oligomers' new 120,000 metric tonne/year low viscosity Polyalphaolefin unit at its facility in Chocolate Bayou, Texas, and a phased expansion to add 50% production capacity at its high viscosity Polyalphaolefin unit in La Porte, Texas, both of which will be fully operPAtional by mid-2025, were both announced this week. Today, Chevron Phillips Chemical ("CPChem") announced intentions to build a new facility in Beringen, Belgium, as part of an expansion of its Polyalphaolefin business. This significant investment, expected to start in 2024, will double the company's PAO production capacity in Belgium (to 120,000MT), pending local permit approval.

"Increased production from this additional investment will be vital to serve expanding demand at a time of considerable innovation in numerous sectors that require PAOs." The new facility of CPChem will benefit significantly from infrastructure, feedstock availability, and operational expertise. In Baytown, Texas, and Beringen, Belgium, CPChem already runs PAO units. With this additional investment, the business is reaffirming its commitment to being the supplier of choice for its expanding worldwide customer base.

According to ChemAnalyst, the prices of PAO in the near future are likely to rise as feedstock Ethylene cost is anticipated to rise as the buying sentiment for Ethylene is increasing throughout the global market. However, once the significant manufacturers finish their expansion plans, prices will likely ease in the European and American markets.

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