Projects: Sunoco US refineries to become ethylene plants?

19 September 2011 00:00  [Source: ICB]

 

Elsenhans: Marcus Hook site would be suitable for a terminal

US group believes its Marcus Hook and Philadelphia refineries could be converted into ethylene plants or terminals

Sunoco executives have laid out several options for the US energy company's Marcus Hook and Philadelphia refineries in Pennsylvania, including the possibility of converting the sites into ethylene plants.

The sites would benefit from the rich ethane reserves in the Marcellus Shale natural gas deposit that is largely concentrated in Pennsylvania.

The two sites could also be used as terminals. CEO Lynn Elsenhans said the Marcus Hook site would be especially suitable for a terminal because of its dock facilities, caverns and adjacent tank farm. Sunoco revealed plans earlier this month to exit its refining business, and has started the process of selling its Philadelphia and Marcus Hook refineries. The company will idle the main processing units at the facilities in July 2012 if a suitable transaction cannot be implemented.

'NO OPTIONS OFF THE TABLE'
Marcus Hook produces 165,000 tonnes/year of benzene, 200,000 tonnes/year of propylene and 165,000 tonnes/year of toluene, while the Philadelphia facility produces 65,000 tonnes/year of benzene, 545,000 tonnes/year of cumene and 180,000 tonnes/year of propylene, as assessed by ICIS.

With its refineries up for sale, Sunoco has decided to focus on its retail and logistics businesses. The company said it is also going to strategically review every aspect of its business. "No options are off the table," Elsenhans said.

The Sunoco refinery sites could be of interest to the various companies that have said they are considering cracker investments in the US, including Anglo-Dutch major Shell and Brazilian chemicals producer Braskem.

Shell says its cracker project would be located in Pennsylvania, West Virginia or Ohio, and the company intends to decide on the location by the end of this year.

The project will allow Shell to leverage its upstream position in Marcellus, and downstream production "will be some combination of polyethylene [PE] and potentially MEG (monoethylene glycol)," said Brian Davis, vice president of global base chemicals at Shell Chemicals.

Braskem said in April that it is considering investing in a cracker and a PE plant in the US.

The company acquired Sunoco's polypropylene (PP) assets, located in Marcus Hook, plus sites in West Virginia and Texas, in 2010. In July it announced the purchase of Dow Chemical's PP business.

SHALE ADVANTAGE
The increase in production of shale gas during the past three to five years has resulted in a dampening in the price of natural gas, and the chemical industry is now watching to see whether the disconnect between the prices of gas and oil in North America will be a short-term effect or a longer-term sustainable trend, Davis said.

Not all of the announced cracker projects are expected go ahead. "A lot of people have made announcements. If all those announcements were to happen, that would be an awful lot of new capacity," he added.

Additional reporting by Anna Jagger in London


By: Bobbie Clark
+1 713 525 2653



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