Shell is developing plans to build a world-scale ethylene cracker with integrated derivative units in the Appalachian region of the United States. Lack of processing infrastructure and markets in the Northeast US has led to speculation that some producers in the Marcellus shale may be forced to curtail natural gas production unless they can come up with a viable way to dispose of ethane gas.
The Shell 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.
“In most gas-producing regions, high-BTU gas and abundant NGLs are good news,” says E. Russell (Rusty) Braziel, managing director of Colorado-based Bentek Energy. “NGLs are generally priced significantly higher than natural gas on a BTU equivalent basis, and improve the producer’s profitability at the wellhead. But in the Marcellus, NGLs are a problem for two reasons. First, today there is not enough gas-processing infrastructure to extract all the NGLs from gas in the high-BTU gas regions of the Marcellus. This problem is being addressed by the construction of a number of new gas plants. But these plants are creating the second problem – increasing volumes of ethane in the Marcellus region. There are essentially no markets for ethane in the Northeast US.”
Other components of the NGL stream can be marketed locally, with the propane sold into the home heating market, and the “heavies” (butanes and natural gasoline) moving into Northeast refinery markets. But in other parts of the country, almost all ethane moves by pipeline into petrochemical markets, predominantly along the Gulf Coast. At present, there are no ethane pipelines or petrochemical plants that use ethane in the Northeast region.
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