Alpha Olefins (Linear)  

*Millions of pounds per year of C₄ - C₃₀ linear alpha-olefins (LAOs) produced by ethylene oligomerization. Capacities are flexible, depending on product mix.

Amoco merged with British Petroleum to become BP Amoco in 1998. In July 2000, BP Amoco Chemicals reverted to the name BP Chemicals after BP Amoco decided to adopt a new unified global brand, centered on the name BP.

In September 1999, Phillips Petroleum revealed an indefinite delay on its previously announced 200-million-pound hexene-1 unit, which was to be constructed at its Pasadena, Tex., site. The following year, Phillips merged with Chevron Corporation and combined their chemical operations into a 50-50 joint venture called Chevron Phillips Chemical Co.

Chevron Phillips commissioned a new alpha olefins plant in Cedar Bayou, Tex., in August 2000. The plant has a nameplate capacity of 750 million pounds and doubled the total LAO capacity at the site, to 1.5 billion pounds. Late in 2001, the company announced another LOA addition to the site – 220 million pounds due on-line in the fourth quarter of 2003.

Shell Chemical is constructing another 700 million pounds per year of LOA capacity in Geismar, La. The plant is scheduled for start-up in mid-2002.

In addition, BP Chemicals has a new 550 million-pound-per-year plant in Joffre, Alberta. The plant was commissioned last summer.

Profile last published 12/3/98; this revision 1/14/02.

DEMAND
1999: 2,279 million pounds; 2000: 2,427 million pounds; 2004: 2,861 million pounds, projected. Demand equals production plus imports (1999: 91 million pounds; 2000: 201 million pounds) less exports (1999: 456 million pounds; 2000: 497 million pounds). Demand data is for C₆ - C₃₀ fractions only, and does not include the butene-1 (C₄) fraction.

GROWTH
Historical (1995 - 2000): 5.8 percent per year; future: 4.2 percent per year through 2004.

PRICE
Historical (1995 - 2000): High, $0.70 per pound, list, C₆ – C₁₈, bulk, tanks, f.o.b. works; low, $0.60, same basis. Current: $0.64, same basis.

USES
Polyethylene comonomer, 33 percent; detergent alcohols, 22 percent; synthetic lubricants and lube oil additives, including polyalphaolefins (PAOs), 21 percent; plasticizer alcohols, 10 percent; alkyldimethylamines and dialkylmethylamines, 3 percent; surfactants, including LAO sulfonates and linear alkylbenzene, 2 percent; fatty acids, 2 percent; miscellaneous, including mercaptans and alkenylsuccinic anhydrides (ASA), 7 percent.

STRENGTH
The fastest-growing markets are those that use LAOs as raw materials (largely C₁₀ for PAO) for synthetic lubricants, in drilling fluids (C₁₆ - C₁₈), and for alkyldimethylamines and dialkylmethylamines. Their respective growth rates are estimated as 10 percent, 5 percent and 5 percent. Collectively, these three categories represent about 19 percent of demand.

WEAKNESS
LAOs for comonomer (C₄ - C₈) use in polyethylene has declined this past year with the economy, from a previous annual growth rate of 7 percent, to 1 to 2 percent currently. The relatively mature plasticizer alcohols and chlorinated alpha-olefins are also growing at the low GDP rate. Together, these three categories represent about 44 percent of demand.

OUTLOOK
The tight alpha-olefins supply situation of 1999 and 2000 was eased with the start-up of Chevron Philips’ new unit eighteen months ago and PB Chemical’s new plant in Joffre, Alberta, last summer. But the general economic decline has considerably weakened this market with its adverse affect on comonomer use in polyethylene production. This situation is expected to persist until an economic turnaround, probably no earlier than mid-2002. At that time Shell is scheduled to start a new 700 million pound unit at Geismar. Unless the economy strengthens, this market will be significantly oversupplied. Annual demand growth, through 2004, is projected to be 4.2 percent.