Shell plans to build an ethylene cracker somewhere in the Appalachian basin of the US where it can take advantage of natural gas liquids production from the Marcellus Shale, the company said Monday.
Shell in a statement said it is developing plans "to build a world-scale ethylene cracker with integrated derivative units" in Appalachia.
"Building an ethane-fed cracker in Appalachia would unlock significant gas production in the Marcellus region by providing a local outlet for the ethane," Ben van Beurden, Shell executive vice president chemicals, said in the statement.
"This fits well with our strategy to strengthen our chemicals feedstock advantage and would be another step in growing our chemicals business to meet the increasing demand for petrochemicals."
Demand for polyethylene in North America is expected to grow, so the economic and efficiency benefits of a regional cracker make this configuration attractive, the company said. Extracting ethane and other natural gas liquids for petrochemicals production is one of these options that also include developing shipping LNG, proprietary gas-to-liquids technology to produce fuels, lubricants and chemicals and gas-for-transport in markets focusing on heavy duty vehicles, marine and rail transportation.
"US natural gas is abundant and affordable. Shell has the expertise and technology to responsibly develop this vital energy resource, including associated products such as polyethylene for the domestic market," Marvin Odum, president of Shell's US operations, said. "With this investment, we would use feedstock from Marcellus to locally produce chemicals for the region and create more American jobs. As an integrated oil and gas company, we are best-placed in the area to do this."
