Everything at Bay City Feeds Something Else

If you buy propanol, butanol, or propionaldehyde in North America, one Texas site has spent four years rebuilding the chain you buy from.

On July 9 OXEA confirmed a final investment decision for a capacity expansion at Bay City, Texas. The scope, in the company's own terms: increase propionaldehyde capacity, fully enable propanol and butanol production, and secure additional feedstock for the carboxylic acids portfolio.

Site preparation starts in 3Q26 and the project completes by the end of 2028.

No tonnage. No capital figure. Yesterday's Ledger spent a thousand words on precisely that habit.

Well, this announcement has a second half. The same day, Air Liquide committed over $200 million to build and operate a purpose-built partial oxidation unit on the OXEA site, supplying syngas and low-carbon hydrogen from early 2029.

That is the number that makes the expansion real.

The Unit Next Door Is a Customer

Bay City runs to about 1,000 acres and roughly 150 people, and it makes the standard merchant oxo slate: butyraldehyde, butanol, propanol, propionaldehyde, undecanal, heptanoic and pelargonic and iso-nonanoic acids, plus the propyl and butyl acetates.

In October 2022, Röhm and what was then OQ Chemicals broke ground on a 250,000 t/yr methyl methacrylate plant on that same site. OQ's half of the deal had its own name, Project Propel, short for "Propyls Elevated."

It hit mechanical completion in April 2024, and what it delivered was high-purity propionaldehyde capacity plus the site services and utilities the MMA plant runs on.

Röhm's plant opened at full industrial scale on June 5, 2026, the first anywhere to run the company's LiMA process at that scale and the first C2-based MMA plant in North America.

So the propionaldehyde line at Bay City has a 250,000 t/yr anchor customer inside the fence (chart below).

That is what makes July 9 worth reading twice. OXEA is expanding propionaldehyde into demand that already sits on the property and started up eight weeks ago.

Syngas Was the Constraint

"Why does this one site keep getting built on while the rest of the file is closures?"

Oxo units run on syngas. Hydroformylation wants the hydrogen and the carbon monoxide in a specific ratio, and where you get them decides whether an expansion is a capital project or a hostage situation.

Yesterday the desk flagged merchant carbon monoxide on the Gulf Coast as a single point of failure, after one CO supply problem in May reached Covestro's entire North American MDI book.

Bay City is the counter-example. Instead of expanding onto merchant supply, OXEA signed a long-term syngas agreement and handed the build to Air Liquide, on the site, on a dedicated unit.

The design is genuinely unusual. It recirculates CO2 back into the reactor to tune syngas composition and improve production flexibility, and it takes roughly 64,000 tonnes of CO2 a year out of the total.

Two things a buyer should take from that:

• The feedstock risk moved. From 2029, propanol, butanol and propionaldehyde out of Bay City sit behind a dedicated unit under contract rather than behind somebody else's allocation call.
• The CO2 loop is a commercial lever. Trimming the syngas ratio on demand is what lets one source feed an aldehyde slate whose product mix keeps moving.

We logged the Air Liquide unit on July 28 and asked what OXEA was expanding to need that much syngas. This is the answer, and it arrived from the customer's side of the meter.

Four Years of Continuous Construction

The reason to take the 2028 date seriously is that this site has not stopped building since 2022 (chart below).

Kent finished FEED in early 2026, took the detailed engineering and EPCM award in July, and expects detailed engineering to close out later this year, all under a three-year master services agreement signed in 2025. The firm also laser-scanned the site to build a digital asset model for future work. Projects carrying a scan campaign and a signed EPCM scope are past the stage where announcements get retired.

Worth noting who owns this. OQ Chemicals was acquired by funds managed by Strategic Value Partners and Blantyre Capital in April 2025 and took the Oxea name back the following month.

Sponsor-owned specialty assets have spent this year trimming capital budgets. This one approved a multi-year build in its first full year of ownership.

Final Thoughts

Most of the addition column in this industry is a dollar figure attached to something that might get built, on a coast where the largest US hydrogen project ever cancelled was written off at the end of June. Bay City is the other kind of entry: a run of units that each exist because the one before them does, with the anchor customer already operating and the feedstock contracted before the reactor is ordered.

None of which gives us a tonne. OXEA still has not published one, so the ledger carries this as an entry with four dates and no number, and we will keep asking.

What it gives a buyer right now is a North American supplier whose 2029 position is being funded, in part, off somebody else's balance sheet.

Thanks for reading.