InterviewGPCA '11: Shell sees advantage in shale-based polyolefins

14 December 2011 06:59  [Source: ICIS news]

DUBAI (ICIS)--Shell Chemicals needs to be involved in polyolefins as this is a major driver of global petrochemicals demand, said executive vice president Ben van Beurden, speaking on plans to build a polyethylene (PE) plant downstream of its proposed gas cracker complex in the US northeast.

The complex, which could be built in Pennsylvania, Ohio or West Virginia, would draw ethane feedstock from the Marcellus shale gas field that runs through all three states.

A decision on the location for the project, which would be started up in the 2016-2017 timeframe, would be announced over the next few weeks, he added. He was speaking on the sidelines of the Gulf Petrochemicals and Chemicals Association (GPCA) Forum in Dubai.

“We are looking at either licensing PE technology or may find a downstream partner to operate the plant,” he added.

“Petrochemicals demand is growing above global GDP growth and a substantial reason for that is polyolefins and so we need to be in polyolefins,” he said.

He would not be drawn on whether Shell might consider further polyolefin investments beyond its US project.

Shell was formerly a major polyolefin producer before it turned its plastics business into a joint venture with BASF and formed Basell in 2000. Basell was subsequently sold to Access Industries in 2005, before it became LyondellBasell through the acquisition of Lyondell Chemicals in 2007.

Van Beurden said Shell might also build a monoethylene glycol (MEG) plant downstream of its US cracker, using its proprietary OMEGA technology.

He added that PE makes a great deal of sense for the project, as half of the North American conversion industry is located in the northeast US area.

The project is challenging as Shell has to coordinate the timing of upstream, mid-stream and downstream investment decisions, said van Beurden.

Shell has shale-gas acreage in the Marcellus field that needs to be brought on stream to match the demand for methane, he said. The ethane has to be extracted from the methane, which is then placed into pipelines for power generation and domestic heating and cooking.

The difficulty of the project is in ensuring that it makes economic sense and the timing of shale-gas production best matches the start-up schedules for the cracker of derivatives plants, he said.

The 6th GPCA Forum is being held in Dubai on 13-15 December, with the theme “Moving Downstream – Creating Value and Sustainable Growth”.

By: John Richardson
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