ALPHA PLANT
An expansion has made a Shell location in Louisiana No. 1 in a particular kind of olefins.
The Gulf Coast has become home of one the largest producers of a common chemical after Shell recently fired up its fourth alpha olefins unit at its chemical plant in Geismar, La.
The multibillion-dollar expansion adds 425,000 metric tons per year in capacity for manufacturing alpha olefins, which are key ingredients in consumer goods such as laundry detergents, motor oils and hand soaps. The new unit brings total alpha olefin production at Geismar to more than 1.3 million metric tons per a year, making it the largest alpha olefins producing site in the world, the company said.
The project represents a major expansion of Shell’s petrochemical business in the region and will support the Deer Park refining and chemical plant in Greater Houston.
The new unit is part of Shell’s push to integrate the refining and chemicals side of its business. The company said the Geismar site is supported with ethylene feedstock from Shell’s nearby Norco, La., and Deer Park manufacturing sites. Ethylene, processed from the natural gas liquid ethane, is the feedstock for most plastics, including the most common one, polyethylene.
Ethylene also is used as a feedstock for alpha olefins. Shell previously had sold much of the U.S. ethylene it produced, but the addition of the alpha olefins unit provided the company with another way to earn profits off its abundant supplies of ethylene, said Steve Zinger, vice president of chemicals at the analyst research firm Wood Mackenzie
“This is one way they could consume some of that ethylene and convert it to a usable product that could be sold,” Zinger said.
Zinger added that the alpha olefins in Louisiana could also feed into the new plastic chemicals complex Shell is building in Pennsylvania. Alpha olefins are used in the production of polyethylene products. The company is building an ethane cracker, which processes ethane into ethylene, which will be the feedstock for on-site production of polyethylene.
The Geismar chemical site near the Mississippi River is used in the production of stronger and lighter polyethylene plastic for packaging and bottles, as well as engine and industrial oils and drilling fluids, according to the company. The alpha olefins unit started in December.
“This is a key growth project for Shell’s global chemicals business, “said Graham van’t Hoff, executive vice president for Shell’s global chemicals business. “Geismar will continue to play a leading role in providing the materials for products that an increasing number of people need and enjoy.”
Shell announced its final investment decision in the project in November 2015 and construction began in 2016. The project included repurposing an idled tank farm, significantly expanding rail in the plant, and building a new water cooling tower. The project took 3,570 metric tons of steel, 18,290 meters of concrete and 85 linear kilometers of pipe to build, according to a Shell announcement.
Shell’s chemical business is already considering another expansion for the Geismar plant, according media reports. Shell is reportedly in the early evaluation stage of a $1.2 billion expansion of a project that would add a “world scale” monoethylene glycol unit to the Geismar site, the Advocate newspaper of Baton Rouge, La., reported. Monoethylene glycol is used in polyester, polyethylene terephthalate resins and engine coolants.
Dozens of petrochemical projects have come online in recent years thanks to the shale boom providing cheap and abundant supplies of natural gas, which is a feedstock for chemicals used in a variety of plastics and consumer goods. Since 2010, the American Chemistry Council estimates that $202 billion in capital investments were announced in the U.S. chemical and petrochemical industries, with about $170 billion targeted for the Gulf Coast.
Wood Mackenzie estimates that U.S. production of ethylene and polyethylene will double between 2015 to 2025, Zinger said.