polyethylene

Shell’s petrochemical complex in Western Pennsylvania has had plenty of challenges on its way to startup and full operation. Announced a dozen years ago, the project was set back by COVID-related construction delays and a rougher-than-expected production ramp-up. But that’s all in the past now (fingers crossed) and the ethane-rich Northeast finally has its first big ethylene plant. In today’s RBN blog, we’ll examine Shell’s return to plastics and what it took to get there. 

Thousands of unionized dockworkers walked off the job at ports along the U.S. East and Gulf coasts October 1 in the first work stoppage for those regions since 1977. Three days later, they’re heading back to work with a tentative deal on wages in hand and an agreement to continue negotiating on other issues through mid-January. The strike didn’t threaten liquid exports like crude oil and LNG but imports of action figures and exports of plastic pellets used to make them — as well as other dry containerized products and feedstocks — hit a brief standstill. In today’s RBN blog, we’ll examine the potential fallout avoided by the labor agreement.

Predictions about what the energy market and the global economy might look like in the future can feel a bit like stargazing — the closer something is, the clearer it appears. But if something is really far away, even the Hubble Space Telescope won’t bring it precisely into view, especially if it’s a still-developing solar system or a distant planet. That’s pretty much where things stand with bioethylene, which could become a shooting star but might also end up as a big cloud of dust. In today’s RBN blog, we discuss the developing market for bioethylene: where it’s being made, what changes might make it more economical to produce in the U.S., and its target markets.

Discussions about energy transition and increased electrification are all around us, whether they involve accelerating the ramp-up in renewable power sources such as wind and solar, facilitating the shift to electric vehicles, or switching to alternative fuels like hydrogen. But amid all the talk about the evolution to a low-carbon world — and away from oil and gas — there’s one area that is sometimes overlooked: petrochemicals. In the U.S., most steam crackers use natural gas liquids (NGLs) as their primary feedstocks, and they also consume a lot of energy — two big red flags in an increasingly ESG-focused world. And that’s giving bioethylene, billed as a green alternative to traditional ethylene, a moment in the spotlight. In today’s RBN blog, we look at how bioethylene is produced, how it differs from ethylene produced from traditional measures, and why it may someday evolve into an attractive alternative for the petrochemical industry, even though it’s far from a sure thing.

The margin for producing ethylene by steam-cracking ethane has been less than a dime per pound since mid-March 2018, and less than a nickel for nearly nine of the past 15-and-a-half months. In fact, for two weeks last September, the ethylene-from-ethane margin fell below zero. And yet, a joint venture of two of the world’s savviest companies — energy giant ExxonMobil and petchem behemoth Saudi Basic Industries Corp., or SABIC — recently committed to building what will be the world’s largest ethane steam cracker: a 4-billion-pounds/year facility to be constructed near Corpus Christi by 2022. Is this a case of blind optimism? No, not when you factor in the cracker’s location, the JV’s concurrent plan to construct two polyethylene plants and a monoethylene glycol plant right next door, and the co-developers’ global market reach. Today, we discuss the thinking behind ExxonMobil and SABIC’s big investment in Texas’s San Patricio County.

Could it get any worse? Possibly, but the last time we saw petchem margins this bad was in the depths of the 2008-09 economic meltdown, and back then the atrocious margin levels resulted in drastic plant curtailments and in some cases permanent shutdowns. But this time around the petchem industry is in the process of bringing on even more capacity! Is the current situation a fluke, or a harbinger of things to come? In today’s blog we examine recent trends in steam cracker margins, by far the largest demand sector for natural gas liquids (NGLs) and consider what these developments may mean for NGL markets in general, and ethane in particular.

NOVA Chemicals’ 1.8-billion-pound/year ethylene plant in Sarnia, ON already is one of the largest consumers of Marcellus/Utica-sourced ethane, and plans are in the works to significantly increase the steam cracker’s ethane consumption. In 2018, NOVA will complete a project that will enable the cracker to be fed 100% ethane; the petrochemical company also is mulling a cracker expansion –– again with ethane as the feedstock –– and a new polyethylene plant next door. All these plans are driven in large part by the availability of low-cost ethane piped from the U.S. Northeast. Today, we continue our review of southwestern Ontario’s NGL, petchem and refining infrastructure with a look at the big effects of NOVA’s plans.

Whether or not Shell Chemicals follows through on its plan to build a $6 billion ethylene plant near Pittsburgh, PA –– and when that steam cracker comes online –– will have a significant impact on the U.S. ethane, ethylene and polyethylene markets. By consuming an estimated 90-100 Mb/d of ethane, the cracker’s operation would reduce the volume of ethane that needs to be moved out of the “wet” Marcellus/Utica production area, trim the amount of ethane available for export from marine terminals, and likely push ethane prices higher than they would otherwise be. Today, we examine what’s driving plans for the Northeast’s first cracker, and what effects the plant will have.

Shell Chemicals is taking steps that suggest it finally may be ready to pull the trigger on a long-debated petrochemical complex which would include an ethylene plant (steam cracker) and three polyethylene units in the heart of the “wet” Marcellus/Utica natural gas liquids production region. If the $3+ billion project advances to construction soon, it would significantly impact ethane market dynamics, not just in Ohio/Pennsylvania/West Virginia but along the Gulf Coast too. And if it turns out we’re in for extended stagnation in drilling and production, the Shell cracker also may undermine plans to build additional NGL pipeline capacity out of the Marcellus/Utica—or any other cracker there.  Today we discuss the likelihood of Shell proceeding with its Beaver County, PA cracker and the effects the project’s development might have.