Shell Chemicals to improve feedstock advantage

14 April 2011 23:37  [Source: ICIS news]

NEW YORK (ICIS)--Shell Chemicals is considering investing further in natural gas and associated products, as the company pursues its strategy of improving its feedstock advantage, an executive with the company said on Thursday.

“Shell takes a global and long-term view of feedstocks,” said Ben van Beurden, executive vice president at Shell Chemicals.

“We are actively looking for new opportunities – integrated from wellhead to derivative plant – that fit with our global strategy of improving our feedstock advantage,” he said, adding, “If it makes sense and fits with our overall strategy, we will consider it.”

He did not divulge any concrete investment numbers.

Shell Chemicals is part of global energy conglomerate Royal Dutch Shell’s downstream organisation.

Over the past decade, Royal Dutch Shell has expanded its natural gas portfolio to tap into previously inaccessible gas.

“Thanks to changes we have made over the past two years at our Gulf Coast assets, Shell Chemicals is in a strong position to take advantage of opportunities that may arise with Shell’s expanding upstream gas production in North America,” van Beurden said.

As such, Shell Chemicals has made substantial changes to its own gas processing capabilities in the US, moving from about 70% liquid feed in 2007 to roughly 75% gas feed in 2010.

“This turnaround in performance and competitive positioning has been vital to our success in the US and for future security of supply to our customers in North America,” said van Beurden.

In 2010, the company had the global capacity to produce 6.02m tonnes/year of ethylene, 2.62m tonnes of styrene monomer (SM), 1.99m tonnes of ethylene glycol (EG), as well as 1.26m tonnes of higher olefins.

“The crude/natural gas differential will continue for some time to come and thus provide US crackers with a competitive advantage over naphtha crackers in Europe and Asia,” said van Beurden.

“Given the technical expertise needed for unconventional gas production, I would expect chemical producers to focus more on using the hydrocarbon feedstocks supplied by mid-stream companies rather than getting involved in their production,” he added.

($1 = €0.69)

By: Ivan Lerner
+1 713 525 2653

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