MTBE: ARCO CHEMICAL'S NO. 1 PERFORMER

ARCO Chemical Co. says methyl tertiary butyl ether (MTBE) has become its "star performer."

In the U.S., the focus is on MTBE's ability as an additive to make gasoline a cleaner burning, more efficient fuel.

In Europe, MTBE demand reflects increased acceptance of unleaded gasoline. ARCO Chemical this year added low cost capacity totaling 5,000-6,000 b/d of MTBE at plants in France and Netherlands, the company told New York financial analysts.

Harold A. Sorgenti, ARCO Chemical president and chief executive officer, said management is evaluating specific opportunities in Europe, Asia/Pacific, and the Americas to add "significant" MTBE capacity during the next several years.

The company also is working on "novel technologies" for MTBE production. Sorgenti described a process that uses the company's basic oxidation technology but produces only MTBE without a coproduct.

"One advantage of this technology is that it would allow us to add propylene oxide capacity at a relatively low cost," he said.

CHANNELVIEW RESTART

Sorgenti spelled out the restart schedule for ARCO Chemical's Channelview, Tex., plant. The entire petrochemical complex had shut down following a July 5 explosion and fire that killed 17 workers (OGJ, July 16, p. 28).

The complex's first MTBE unit resumed operations in mid September.

The current schedule for restarting the remaining units called for butanediol to be on stream by the end of September, polyols this month, and the propylene oxide/styrene plant in December.

Sorgenti said insurance will ease a substantial part of the financial effect of the accident.

The company has business interruption coverage with a $12.5 million deductible, which was met in the third quarter. It is considering accruing a portion of the business interruption claim for the third quarter.

ARCO Chemical also has property damage insurance with a $20 million deductible. However, the depreciated value of assets destroyed at Channelview is "significantly less" than that sum.

"The personal injury litigation will be complicated and take some time to be resolved," Sorgenti said. "It is difficult to estimate the financial impact any ultimate resolution will have."

CAPITAL PROGRAMS

ARCO Chemical's capital programs will not be diminished by any loss incurred at Channelview, Sorgenti said.

Here is the status of recent capital projects:

The company has completed low cost expansions at its plant in Fos-sur-Mer, France, for 100 million lb/year of propylene oxide. Construction continues on a plant to produce 220 million lb/year of conventional and polymer polyols. Start-up is expected early next year.
In Korea, a joint venture plant to produce propylene oxide, styrene, propylene glycol, and polyols is near completion. It should be on stream by yearend.
The company has brought on stream a new plant to produce tertiary butyl hydroperoxide in Rotterdam. This plant doubles ARCO Chemical's European capacity for TBHP.

Among other projects under development by ARCO Chemical is a process called Superflex. It upgrades low value hydrocarbon streams into olefins-ethylene, propylene, and butylenes-the company uses as feedstock for key products.

"The Superflex process represents an economical alternative to traditional technology for olefins production," Sorgenti said. "We are exploring arrangements for integration opportunities with several olefins producers."

Another project is a new, patented technology for producing hydrogen peroxide. Growth in hydrogen peroxide is driven by its environmental advantages. ARCO Chemical called it a safer alternative to chlorine for bleaching processes in paper manufacturing and other industries.