UpdateShell still years away from final decision on new US cracker

07 March 2012 22:39  [Source: ICIS news]

Adds paragraphs An ethylene cracker9-20

HOUSTON (ICIS)--Anglo-Dutch oil major Shell is still years away from making a final decision whether to fund a new cracker in the northeast US, the company chief executive cautioned on Wednesday.

“We are quite a few years away from…a final investment decision,” Shell CEO Peter Voser said on the sidelines of the 31st annual IHS CERAWeek energy conference in Houston.

He would not give a timeline for the final decision.

Shell could still have a cracker completed by 2017 if it began construction in 2014.

“But site location is one of the early things you need to do,” Voser added.

Shell is considering Pennsylvania, Ohio and West Virginia as possible sites for the project.

The states have large reserves of natural gas from the Marcellus Shale formation, which would provide the cracker with natural gas liquids (NGL) for feedstock.

The company said it would name a potential site location early this year.

Shell announced on 6 June it was developing plans for a worldscale ethane cracker with integrated derivative units in the Appalachian region.

However, company officials cautioned in November that Shell was still only in the early stages of its plans.

Several companies have said they are planning to build a crackers or are at least considering such projects in the US.

Chevron Phillips Chemical plans to build a 1.5m tonne/year ethane cracker and two PE plants, each with a capacity of 500,000 tonnes/year.

Formosa Plastics said plans to build an 800,000 tonne/year olefins cracker, a propane dehydrogenation (PDH) unit and a low-density polyethylene plant at its Port Comfort, Texas, site, with a start up as early as 2016.

Dow Chemical's new ethane cracker will be a brownfield project it will likely build in Texas, with start up in 2016-2017, the company said.

Renewable Manufacturing Gateway (RMG) and Aither Chemicals signed a letter of engagement to collaborate on financing and building a petrochemical complex using Aither's ethane-cracking technology.

In addition, Thailand-based polyester producer Indorama and a partner are in the early stages of studying the feasibility of a new US cracker.

Sasol has started a feasibility study for a cracker and derivatives project at Lake Charles, Louisiana.

Mexico-based Mexichem said it was in early talks to take an ownership stake in a new ethylene plant in the US, it said.

SABIC said it would consider investing in a US cracker either with a partner or by itself.

Braskem also said it was considering a greenfield investment in an ethylene and PE plant in the US.

Additional reporting by Al Greenwood and Brian Ford

By: Bobbie Clark
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