NPRA ’10: Shell US ethylene capacity cut 22% in switch to 70% gas feed

30 March 2010 00:38  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS news)--Shell has cut ethylene capacity from its four crackers in the US by 22% as it has invested to process more gas, a senior company executive said on Monday.

Investments over the past two to three years at the Norco and Deer Park ethylene plants in Louisiana and Texas had given Shell the capability to crack about 70% cost advantaged gas feedstock, Shell Chemical LP’s general manager for lower olefins, Dan Carlson told ICIS news on the sidelines of the NPRA's International Petrochemical Conference (IPC).

Shell’s total ethylene capacity in the US was cut in 2008 from 6.4bn lbs/year (2.9m tonnes) to 5.8bn lbs. A cut to 5bn lbs was made during the severe downturn last year, he said.

“We’ve changed the footprint, Carlson said of the work that had been done to reduce overall capacity and switch from an earlier 70% - 75% liquids configuration. The bulk of investment at the crackers - Shell has two in each location - was in logistics and the handling systems used to move gas as opposed to liquid feedstocks around.

“The relatively low gas price continues to make the US business pretty sustainable,” Carlson said. He also thought that relatively low ethane feedstock costs would continue to be a feature of the US market.

“We’ve been through a pretty difficult period,” he added, speaking of the recent industry environment. However, he was relatively upbeat about the ongoing, although still uncertain, upturn. “We see the cyclical downturns but they don’t tend to last,” he commented.

Hosted by the National Petrochemical & Refiners Association (NPRA), the IPC continues through Tuesday.

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