30 September 2013 22:28 [Source: ICIS news]
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HOUSTON (ICIS)--LyondellBasell might not have relocated its research and development (R&D) centre to Texas had it not been for the advent of shale gas, the CEO of LyondellBasell said on Monday.
Like other petrochemical producers, LyondellBasell is expanding the capacity of many of its plants in the US to take advantage of low-cost feedstock, made possible by shale gas.
LyondellBasell relocated an R&D centre from Philadelphia, Pennsylvania, to Channelview, where it will be closer to the company's other plants in Texas.
The company held an opening ceremony for the Houston Technology Center on Monday.
Had it not been for tight oil and shale gas, the R&D centre might not be in the Houston area, although it is an ideal site for such a facility, said Jim Gallogly, LyondellBasell CEO.
He made his comments on the sidelines of the opening ceremony of the centre.
During the opening ceremony, Gallogly explained how the prospects of the US chemical industry changed because of shale gas, made possible by hydraulic fracturing and horizontal drilling.
"In 2000, the chemical industry in the US was in very desperate times," Gallogly said.
At the time, natural gas prices were much higher, causing prices for ethane and other natural gas liquids (NGLs) to also rise. Consequently, US chemical producers were losing their competitive advantage against those in other parts of the world, which relied on oil-based naphtha as a feedstock.
Within months, the US chemical industry lost 30% of its market share, Gallogly said.
The industry's fortunes reversed with the development in recent years of shale gas, which increased US supplies of NGLs.
Many companies, including LyondellBasell, have announced plans to increase capacity so that they can take advantage of the low-cost feedstock.
"We've had a phenomenal resurgence in the chemical world," Gallogly said. "Our company is also benefitting from that."
The company's R&D centre in Channelview will develop process technologies and chemical catalysts for its intermediates and derivatives business, the company said on Monday.
The centre will focus on improving catalyst and process technologies to lower manufacturing costs, increase yields and reduce capital costs for new construction, the company said.
The centre will support the company's Texas plants in Channelview, Bayport and La Porte; its Dutch plants in Botlek and Maasvlakte; its French plant in Fos-sur-Mer; and its Chinese joint venture in Ningbo.
The Channelview centre replaces one in Philadelphia, Pennsylvania, from which 22 people will relocate, LyondellBasell said.
"Having a research centre for our intermediates business on the US Gulf Coast in proximity to our manufacturing, commercial and engineering operations creates a critical mass that did not previously exist," according to a statement by Patrick Quarles, senior vice president of intermediates and derivatives.
Other LyondellBasell research and development (R&D) centres include Cincinnati, Ohio, which focuses on polyolefin product application and development in North America; Frankfurt, Germany, for polyethylene (PE) and metallocene catalysts; and Ferrara, Italy, for polypropylene (PP) and Ziegler-Natta catalysts.
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