I saw this at the Shell layoff site and was intrigued. Basically and this is from Shells site... We have this new ethylene plant and the chem plant and I hear alot of talk about how this buisness is a pillar buisness for the future. However with possibly lower demand for plastics (where the majority of ethylene and propylene) end up in, wont this buisness suffer too in coming years. Maybe Im naive, also it seems like the chemical market is over saturated. Thoughts?
5 replies (most recent on top)
Lots of tech talk and that is certainly valuable for some to know.
But that doesn't escape the fact there is no future of petrochemicals.
Unless thinking short-term.
Petrochemical Engineering departments maybe a bell-weather?
About as popular as Medieval Studies right now.
While it is true US refineries were not designed for light crude, US refineries are running a ton of the stuff. BT, BR, and BM combined run 600-700 kbd of light crime. After BLADE starts up in Beaumont, 850-950 kbd of light crude capacity.
The refineries then fill with heavy crude, mostly from Canada these days. Also run Gulf of Mexico mediums. This is a dramatic shift from the early 2000s when these refineries were running very high % imports from Mexico, Venezuela, and the Middle East. Today the most economic crude for US refineries is all from North America.
Light crude doesn’t just make gasoline. It makes naphtha (major petchem feedstock), jet fuel, and diesel.
Fuels is a cr-p business these days, but the guy posting about a Petrobras refinery being the only asset in the US that can run light crude is incorrect.
Going forward, for polyethylene, a lot depends on where your production facilities are located and the source for the ethane to make the ethylene to make the polyethylene. At the moment, there is a cost advantage to producing in the United States due to cheap shale gas relative to the price of oil. The new Shell plant is being built outside of Pittsburgh. That is why all the PE reactors built by XOM the past ten years have been in Texas (near Corpus Christi, Beaumont, Mont Belvieu) and not Singapore or France. I will be curious to see if the proposed plant in PRC ever gets built.
The thinking is probably that if polyethylene demand wanes, it is high cost producers that get squeezed and have to shut down first.
To add, shale liquid is only fit to produce gasoline - where is the future market in the US? US has only one refinery (previously owned by Petrobras) fit to process exclusively shale output (light crude).
@OP "The future of chemicals" is driven by the hope of the monetization of shale gas (C1/C2 hydrocarbons) with gasoline and diesel demands in a dismal prospect. You're right about ethylene/propylene market being saturated. It remains to be seen how it plays out.