In a recent turn of events, Shell has reportedly commenced production from its fourth alpha olefins unit at its chemical plant located in Geismar. The company stated that the expansion is a multi-billion dollars move that would augment the production capacity of the chemical manufacturing site by 425,000 metric tons per year.
This would increase the overall alpha olefin production at Geismar to reach over 1.3 million metric tons per year, thereby making the Gulf Coast the largest producer of alpha olefins in the world.
For the uninitiated, alpha olefins are widely used as ingredients in consumer goods like laundry detergents, hand soaps, and motor oils. The project signifies a massive expansion of Shell’s petrochemical business in the region and will back the Deer Park facility located in the greater Houston area, cite credible sources.
As per Shell, the newly added manufacturing unit is a part of the company’s initiatives to integrate the downstream side of its business. Owing to Geismar site’s easy access to advantaged ethylene feedstock from Norco, La and Deer Park manufacturing sites, the site can effectively respond to market conditions, the company stated.
Steve Zinger, VP of Chemicals at Wood Mackenzie, said that Shell previously sold most of the U.S. ethylene it manufactured, but the addition of an alpha olefins unit means that the integrated downstream operations could be used for company’s benefit. However, in Shell’s case, the country is a bit long on ethylene, so this is one of the ways they could consume some of the ethylene and turn it to a usable product that could be traded in the polyethylene market or exported to global markets where demand growth is still rising, Zinger added.
Based on media reports, Shell’s chemical business is planning another expansion project for the Geismar plant. The company is in an early evaluation stage of an expansion project worth $1.2 billion that will introduce a world scale mono-ethylene glycol unit to Geismar, reported sources.