FocusShell picks Linde for FEED on proposed cracker in Pennsylvania

18 April 2014 17:51  [Source: ICIS news]

Focus story by Al Greenwood

A map of the Marcellus shaleHOUSTON (ICIS)--Shell has chosen German engineering firm Linde to conduct the front-end engineering and design (FEED) work for the company's proposed ethane cracker in western Pennsylvania, the company said on Friday.

The project is part of a framework contract that Linde won, under which it would build any of Shell's ethane crackers around the world.

For such a project, FEED typically takes 1-2 years, Shell said. The process will give Shell more insight into the possible cost of the Pennsylvania cracker, which will be critical for determining whether the company will ultimately build the plant.

If Shell decides to build the cracker, construction could last up to four years, and it would be built in Monaca, Pennsylvania, in the western part of the state.

Along with the ethane cracker, the Monaca complex could also produce polyethylene (PE) and monoethylene glycol (MEG) units.

So far, Shell has an option to purchase the Monaca site from zinc producer Horsehead, and the company has begun demolition.

It has also acquired one property next to the site, and the company is in talks with a limited number of the owners of other nearby sites, Shell said.

So far, Shell has about 10 signed ethane supply agreements in place, the duration of which would last up to 20 years, the company said. Shell is continuing to improve the ethane supply position of the possible cracker from the region's gas producers.

Shell cautioned that the FEED process does not indicate that the company has finished evaluating the project or that it will go forward.

The company still needs to confirm that the project is competitive when judged against others that Shell is considering around the world, it said.

For the Shell cracker to be viable, securing ethane will be critical.

Although the plant could have access to ethane produced from the Marcellus and Utica shale formations, natural gas liquids (NGLs) from the region are no longer stranded.

INEOS plans to import ethane from the region to feed its Grangemouth cracker in the UK.

INEOS has already reached a 15-year agreement to ship ethane from the US east coast to its European crackers.

In eastern Canada, NOVA Chemicals is cracking natural gas liquids (NGLs) from the Marcellus shale at its Corunna cracker.

In addition, Enterprise Products is developing the Appalachia-to-Texas (ATEX) pipeline, which will take up to 190,000 bbl/day of ethane from the eastern US to the Gulf Coast this year.

Also, Williams and Boardwalk are building a natural gas liquids (NGL) pipeline from the Marcellus. It will have a capacity of 200,000 bbl/day. 

Other companies are also considering adding ethylene capacity near the US east coast.

Odebrecht is considering building a cracker and three PE units in Wood County, West Virginia. Braskem would operate the site, which would be called Ascent, short for Appalachian Shale Cracker Enterprise.

If Odebrecht pursues the project, it may be similar in scope to the Ethylene XXI complex, a 75:25 joint venture between Braskem and Grupo Idesa.

Ethylene XXI will be built in Mexico, and it is expected to include a 1.05m tonne/year ethane cracker, two high density polyethylene (HDPE) plants with capacities of 350,000 tonnes/year and 400,000 tonnes/year, as well as one 300,000 tonne/year low density polyethylene (LDPE) plant.

In addition, NOVA Chemicals plans to expand the ethylene capacity at its Corunna cracker by about 20%.

The cracker has a capacity of 839,000 tonnes/year, according to ICIS plants and projects.

With US east coast demand on the increase, midstream companies have been developing gas processing units and fractionators that will increase supplies of ethane and other NGLs in the region.

MarkWest is among the most ambitious. It has completed several projects in the Marcellus and Utica shales that will increase NGL production in the region.

In February, Markwest said that it has increased total processing capacity in the Marcellus and Utica shales to over 2.8 billion cubic feet/day (2.8 bcf/day).

It had completed five gas processing facilities totalling 1 bcf/day in the past five months, it said in February. In all, it has 19 major processing and fractionation plants under construction in the northeast.

Several companies have announced plans to expand ethylene capacity. The following lists the projects:

Company C2 capacity Location Start-up
Chevron Phillips Chemical 1.5m tonnes Cedar Bayou, Texas mid-late 2017
ExxonMobil Chemical 1.5m tonnes Baytown, Texas Late 2016
Dow Chemical 1.5m tonnes Freeport, Texas 2017
Sasol 1.5m tonnes Lake Charles, Louisiana 2017
Formosa Plastics 1.0m tonnes Point Comfort, Texas Q1 2017
Formosa Plastics 1.2m tonnes Louisiana NA
Occidental Chemical/Mexichem 544,000 tonnes Ingleside, Texas 2017
Axiall/Lotte World-scale Louisiana 2018
Shell World-scale Monaca, Pennsylvania 2019-2020*
Odebrecht World-scale Wood County, West Virginia NA
Shin-Etsu 500,000 tonnes/year NA NA
INEOS 115,000 tonnes Chocolate Bayou, Texas 2014
Williams 273,000 tonnes Geismar, Louisiana Apr 2014
Westlake Chemical 82,000 tonnes Calvert City, Kentucky Q2 2014
LyondellBasell 363,000 tonnes La Porte, Texas mid-2014
Chevron Phillips Chemical 91,000 tonnes Sweeny. Texas 2014
Westlake Chemical 113,000 tonnes Lake Charles, Louisiana 2014
LyondellBasell 113,000 tonnes Channelview, Texas 2015
LyondellBasell 363,000 tonnes Corpus Christi, Texas Late 2015
Huntsman 19,300 tonnes Port Neches, Texas NA
BASF Fina Petrochemicals NA Port Arthur, Texas 2014
Source: Companies, ICIS analysis

By: Al Greenwood
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