Enabling Resilience: Midstream Strategies Appear Critical to Long-Term Energy & Chemicals Success

Companies Mentioned: Phillips 66, Chevron, Chevron Phillips Chemical, Shell, BP, Nova Chemicals, LyondellBasell, OMV, ADNOC, Borouge, Borealis, Dow, Enterprise Products, Invista, BASF, Aramco, Enbridge, Energy Transfer, Targa Resources, Oneok, MPLX, Kinetic Holdings, Plug Power, Ballard, Lhyfe, Hyzon, Thyssenkrupp, Volvo Cars
Commodities Mentioned: Ethylene, Propylene, NGL, Ethane, Polymer Grade Propylene (PGP), Polyethylene (PE), Propane, Butane, Oil, Hydrogen, Electrolyzer, Fuel Cells

Key Findings

General Thoughts: Though global efforts to shift away from fossil fuels have been put under pressure lately, this trend will unlikely persist long term – those failing to integrate into growth markets will face more challenges.
Supply Chain/Commodities: We discuss the LyondellBasell metathesis unit growth project in TX, as we view it as a positive integration step to use its low-cost ethylene production positions to enhance its propylene production.
Energy/Upstream: We discuss the midstream business at Phillips 66, which we compare to its peers in terms of G&P, pipeline, frac, and export capacity, as we think it enhances the competitive position of its chemical business.
Sustainability/Energy Transition: Plug Power is advancing its Graham, TX, green hydrogen project, which faces risks with funding and government incentive cuts, and we discuss potential hydrogen production costs at this site.
Downstream/Other Chemicals: The German automotive industry faces considerable headwinds, which we think will persist in 1H25 and keep regional product flows to this major chemicals end-market under pressure.