06/10/2011 | Editor: Frank Jablonski
At Norco, two out of the three olefins units were already processing lighter feedstock. The major work at Norco involved reconfiguring the third olefins unit, one of the largest heavy liquid crackers in North America at the time.
“It was a big decision in 2009 to take down this plant to carry out the necessary extensive modifications,” says Regetz. “But it was due for a planned maintenance turnaround and we were helped by the fact that the global economic downturn had reduced market demand for olefins.
“We were able to complete the work on the cracker and secure a long term over-the-fence ethane supply deal with a nearby gas processor during the worst period of the recession. The unit was brought back on stream just in time for the market recovery in early 2010.”
The switch to lighter cracker feeds has altered the base chemicals product portfolio. “With a higher proportion of lighter feeds we do not get the same yield of crude C4/C5 (butadiene/isoprene) and aromatics-containing streams,” says Yard. “We have replaced lost C5 volumes by shipping it from Europe and so both keeping our isoprene extraction unit at Deer Park loaded and preserving these valuable molecules for USA customers.”
Commercial agreements with co-producers of C4 streams have closed some of this feedstock gap, allowing Shell to maintain its strong position in the North American butadiene market. “Stricter requirements to remove benzene from gasoline have also provided additional volumes of aromatics-containing streams, from both Shell and third party refineries,” says Yard.
The ability to crack some advantaged liquids has been retained at both manufacturing sites, however. “The plants still need to run a minimum volume of liquids but now that comes solely in the form of advantaged hydrowax and mainly from our Mobile, Alabama, refinery,” says Yard. “The Mobile feedstock has retained its cost advantage and has helped to maintain a strong co-product network.”
He says the new feed strategy also helped to focus efforts to improve the cost position of both sites. “It allowed us to strip out non-critical activities, simplify our supply chain and generally become more efficient at production and maintenance. Because we are no longer importing liquid feeds into the USA, we have been able to slim down a previously complex and costly to maintain supply chain for liquids handling.”
Carlson says that as a result of these measures the business performance for 2010 has improved dramatically, and the outlook for the industry as a whole in North America is looking more positive.
“With greater access to advantaged gas liquids, Gulf Coast crackers can enjoy a lower cost of ethylene position than naphtha crackers in Europe and Asia. The upheaval in energy markets has been painful but it has ultimately given the base chemicals industry in the USA a new lease of life. Now it can compete on the global market and continue to be a large net exporter of chemicals.
“With our strengthened business and asset configuration we are ready to take full advantage of this opportunity. We’re not done by any stretch and will still be making staged investments to strengthen our supply network further, and to capitalise on our feedstock processing capability. “But we’re in a different mindset now, far from where we were just a few years ago. We’re looking for opportunities to grow rather than just fixing problems.”
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