Shell to crack more lighter feeds at US Gulf coast complexes

Source: ICIS News

2010/09/27

LONDON (ICIS)--Shell will continue to lower costs at its Deer Park and Norco cracker complexes on the US Gulf coast - all while relying on lighter feeds, an executive at Shell Chemicals said on Monday.

“We will carry on the shift between gas and liquids over the next few years,” said Graham van’t Hoff, Shell Chemicals’s vice president, global base chemicals, during a press briefing.

The focus would be on a shift towards cracking what Shell calls advantaged gas feeds at the sites.

These gases include low-cost ethane and refinery off-gases for which Shell and other refiners see little real alternative value.

Shell has cut US Gulf coast cracking capacity by 22% in recent years and shifted the feedstock capability of its cracking sites there from 75% liquids/25% gas to 75% gas.

Production capacities at either site were unlikely to rise, van’t Hoff said.

A focus remained on fixed costs at the units, which have been cut sharply over the past two years.

Headcount would continue to fall at the sites by natural attrition, he said. Maintenance and contractor costs would also be reduced in 2011 and 2012.

Van’t Hoff said Shell expected to make more of “advantaged” liquid feedstocks at its Moerdijk cracker in the Netherlands which is linked to the large Pernis refinery.

“Pernis, Moerdijk integration makes it one of the most competitive petrochemical hubs in Europe,” Shell said.

The Moerdijk cracker has been re-configured to take a wider range of feedstocks from the refinery. Addition of a furnace to crack hydrowax gave the cracker an 8% capability to crack the advantaged feed.

By 2010 25% of the cracker was advantaged, van’t Hoff said, with the proportion expected to rise to 55% by mid decade.

More hydrowax and liquefied petroleum gas (LPG) would be cracked at the site, he said.

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