Now There Are Three Crackers!

Shell Chemicals has announced plans for a world-scale ethylene cracker in Appalachia.* It intends to tap into ethane from the natural gas producing Marcellus Shale region. Chevron Phillips and Dow have already unveiled their plans to build world-scale crackers on the U.S. Gulf Coast, both in the 2017 timeframe. (World-scale crackers are a little more than 1 million metric ton per year.) Here are a few things that I wonder about Shell’s announcement: 1) Shell says its “leading option” for derivatives is polyethylene. This is a very curious statement. For one thing, Shell doesn’t have a polyethylene business. It divested that when it and BASF sold their Basell joint venture to Access Industries. Now that venture is a part of LyondellBasell. I find it hard to believe that Shell would build a polyethylene plant by itself. It is possible, but I think that a joint venture or another company to build the polyethylene plant is a more likely scenario. 2) Shell is a large producer of alpha-olefins and ethylene oxide. The Midwest, with all the detergents makers, is a large consumer of both chemicals. Yet those don’t seem to be part of the plan. 3) Bayer MaterialScience has said that it would like to host a cracker at one of its sites in West Virginia. I wonder if Shell is choosing among these locations. (I think that is highly probable.) * (Correction: I originally said West Virginia in the first sentence. Shell didn't say that. I was jumping the gun a little bit on that.)

Author: Alex Tullo

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