According to Joseph Chang, an editor on the “ICIS.com” information service, at least three major chemical companies are proceeding with plans for world-scale chemical reactors (‘crackers’) to feed on ethane from the Marcellus shale. These plants would produce ethylene such as to contribute to as much as a 29% increase in this commodity in the US by 2017.
Joseph Chang has written that: “Many are counting on naphtha-based crackers in Europe and Asia shutting down. Yet for Europe, integrated polyethylene (PE) margins have equaled or exceeded those of US ethane-based producers in every year from 2008-2011. So far in 2012, US producers have taken the lead as ethane prices have plunged. While some select crackers may shut down, don’t count on a wave of Europe cracker closures. Their integrated PE margins taking into account co-products propylene and butadiene from naphtha cracking have been solid.”
In a related article from the “ICIS.com” information service:
World-scale crackers tend to take four to five years to build, cost roughly $1bn to construct, and when completed can generally produce about 2bn lbs (907,441 tonnes) of ethylene/year. “The Marcellus will be the largest source of gas supply, with many pipeline projects lined up through 2012,” says Iain Reid, analyst at US-based equity research group Jefferies. “The play is still in its infancy.” Since the cost of a new greenfield cracker is so high, the extra capacity will be brought on “through restarts or debottlenecking.”
A number of the larger chemical companies have announced planning activities for chemical operations in the Marcellus region, which may well stimulate a major boom:
(1)Shell Chemicals plans to build an ethylene cracker in Ohio, West Virginia or Pennsylvania. (2) Dow Chemical plans to build three petrochemical facilities and restart another idled during the recession. (3) Eastman Chemical restarted a small ethylene cracker in July 2011 that had been shuttered in recent years. (4) Bayer is in talks over building ethane crackers at its industrial parks in West Virginia. (5) Westlake Chemical tentatively plans to use shale-based feedstocks for expansion in Kentucky in 2014. (5) Canada’s NOVA Chemicals has signed agreements with Norway’s Statoil and US-based Caiman Energy for ethane sourced from the region. (6) US Steel has invested $95m in an Ohio facility to meet construction demands, including drilling rigs, in the region. (7) Other companies, including Occidental Chemical, Chevron Phillips Chemical, and LyondellBasell, are considering expanding operations in the US because of the abundance of shale gas in the nation.
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