February 19, 2021
It’s in the N-95 masks protecting health care workers in the fight against COVID-19 and the car that keeps you safe on the road. It captures the fizz in your soda bottle and helps your favorite snacks stay fresher longer.
It’s polypropylene, one of the world’s most versatile plastics. And Phillips 66 makes it.
The company operates a 775 million pounds/year (350,000 metric tons/year) capacity plant at the Bayway Refinery in Linden, New Jersey, and markets the resin under the COPYLENE® brand and through unbranded channels. Recent improvements and increased feedstock supply from Bayway and the Sweeny Refinery in Texas are keeping the plant competitive in an evolving market.
“We’ve spent a lot of money improving the reliability and utilization of the plant because we’ve built a viable business,” said Greg Osterholt, Manager of Polypropylene for Phillips 66. “We went from being a way to clear propylene from the refinery to building a true business.”
Small producer, but mighty
The Specialties business underscores the value of a diversified portfolio and of vertical integration between refining and petrochemical processes. Phillips 66 makes the resin from propylene monomer, a gas, effectively upgrading a byproduct of the refining process into an in-demand, higher-value polymer.
Phillips 66 is the smallest polypropylene producer by capacity in a 16 billion pounds/year U.S. market, but what it lacks in size it more than makes up for it in terms of location, reputation and portfolio. It makes 30 grades of the resin for multiple applications, but its sweet spot is in food packaging — think ketchup bottle caps, cereal liners, potato chip bags and microwave-safe food containers.
It is one of only two producers in the Northeast. This gives Phillips 66 a logistical advantage because the Northeast and Midwest house the bulk of U.S. converter demand, while much of the production capacity is 1,000 miles or more away in the Gulf Coast region.
“We are close to the demand and away from the storm-prone Gulf Coast,” Osterholt said. “That’s why a lot of companies buy at least a portion of their product from us — as an insurance policy.”
Discovered by Phillips Petroleum
Polymers are in Phillips 66’s DNA. Both polypropylene and high-density polyethylene, another highly versatile plastic resin, were discovered by Phillips Petroleum researchers Paul Hogan and Robert Banks in Bartlesville, Oklahoma, in 1951. CPChem, the petrochemical joint venture with Chevron, carries on much of that legacy as a global player in the polyethylene market.
Polypropylene enjoys excellent chemical-, fatigue- and heat-resistance properties. It is also highly recyclable. Industrial and consumer applications also include automotive components, appliances, fibers for carpeting, health care and hygiene, including baby diapers. It has been at the forefront of the fight against COVID-19 because it is in the N-95 masks and face shields used by first responders and health care workers.
An expanding market
The U.S. polypropylene market is undergoing major capacity expansions for the first time in two decades thanks to the shale revolution. Most of these expansions will take place in the Gulf Coast and rely on technologies that convert propane into propylene, solving the type of feedstock-supply constraints that previously hindered production growth.
Osterholt is unfazed. Phillips 66, he said, sees the opportunity where others might see a threat.
“The opportunity for us is that because we are the smallest producer, we can create more of a boutique business,” he said. “We are willing to do smaller campaigns of product that the bigger producers aren’t willing to do.
“It’s a balance of being able to pursue higher-value opportunities without upsetting the plant’s complexity or sacrificing its efficiency.”