Shell Chemicals is more than likely to re-enter the polyethylene market with its new proposed petrochemical complex in Pennsylvania, but it would not be a core business for the company, Executive Vice President of Shell Chemicals Graham Van't Hoff said in an interview Thursday.
Polyethylene is currently not part of the company's portfolio. In March 2012, Shell signed a land option agreement with Horsehead Corp. to evaluate a site in western Pennsylvania for a potential petrochemical complex that would include an ethane cracker that would upgrade ethane produced from the Marcellus Shale.
The site is in Potter and Center Townships in Beaver County, near Monaca, Pennsylvania, about 27 miles northwest of Pittsburgh.
"We are not landed in any of those pieces, the cracker project is not confirmed and polyethylene is part of that evaluation," said Van't Hoff. "But it is more than possible that we will return to PE, as a component of complexes that we do in the future." Van't Hoff added that PE will not be a core business for Shell.
"We do it only because it is an extension to the crackers," he said. Shell is also looking at monoethylene glycol and alpha olefins as potential growth areas.
The company would likely build its complex in the Marcellus region's wet gas reserves commonly found in southwestern Pennsylvania, eastern Ohio and West Virginia. Shell aims to locate the complex within a couple hundred miles from a large concentration of PE demand, likely converters in the Midwest.
Shell is the first among those who have announced new cracker projects in the US on the back of the US shale gas bonanza, to settle on the northeastern US, a region that despite its feedstock riches remains relatively untouched by the petchems industry because of a lack of infrastructure.
Van't Hoff says that even though it is an isolated unit, and there are disadvantages in terms of location because the complex will not be tied to an ethylene grid, sometimes the best advantaged feedstock positions come from the fact that there are a lack of alternatives to move the product to.
Van't Hoff was appointed to Executive Vice President, Shell Chemicals on January 1, 2013. Prior to his current role, Van't Hoff was Global VP Base Chemicals in mid-2008, Global VP Base Chemicals at the beginning of 2009, before being appointed as Chairman Shell UK on 1 May 2011 and later that year Executive Vice President, CO2 and Alternative Energies.
