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Shell plans world-scale chemical plant in USA

Shell is developing plans to build a world-scale ethylene cracker with integrated derivative units in the Appalachian region of the United States.

The cracker would process ethane from Marcellus natural gas to produce ethylene, one of the primary building blocks for petrochemicals. Shell is evaluating derivative choices and the leading option is Polyethylene (PE), an important raw material for countless everyday items, from packaging and adhesives to automotive components and pipe. Most of the PE production would be used by northeastern US industries.

“Building an ethane-fed cracker in Appalachia would unlock significant gas production in the Marcellus region by providing a local outlet for the ethane,” said Ben van Beurden, Shell Executive Vice President Chemicals. “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 PE in North America is expected to grow, so the economic and efficiency benefits of a regional cracker make this configuration attractive. As a leader in gas technologies, Shell has an array of long-term options to monetise natural gas. Extracting ethane and other natural gas liquids for petrochemicals production is one of these options that also include developing shipping solutions for LNG (liquefied natural gas); 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,” said Marvin Odum, President, Shell Oil Company. “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.”

Selection of the site for the cracker and derivative units would be determined in the next phase of this project. Building the facility would be subject to receiving all applicable permits.

Notes to editors:

  • A cracker breaks down large molecules from oil and natural gas into smaller ones. An ethylene cracker produces base petrochemical “building blocks” which are the first stage in the chemicals manufacturing chain.
  • Derivatives are the chemicals that are made during subsequent processing stages, using products from the cracker. Polyethylene is a derivative of ethylene.
  • Shell owns and operates four petrochemical crackers in the US at Deer Park, Texas and Norco, Louisiana.
  • Natural gas companies have to remove Natural Gas Liquids (NGLs) from methane to make it “pipeline quality.” NGLs are made up of ethane, propane, butane and other compounds. These can be used as feedstock to produce chemicals. Propane and butane are types of Liquefied Petroleum Gas (LPG) and can also be used as fuels.
  • Ethylene is a very important base chemical in the chemical and plastics industries. Ethane is a feedstock for ethylene.

For further information, please contact:

Shell Media Relations:
Shell US Media Line
Tel: +1 713 241 4544

For non-media queries:
Email: shellchemicalsproject@shell.com

Cautionary Note

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this press release “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this press release refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as “associated companies” or “associates” and companies in which Shell has joint control are referred to as “jointly controlled entities”. In this press release, associates and jointly controlled entities are also referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 24% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.

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