Acceleration of Flexible Feedstock Strategy Strengthens Ethylene Production in US Gulf Coast

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on a major programme to strip out underperforming or peripheral parts of the base chemicals business in the USA, simplify its operations, reduce costs and develop stronger, more integrated feedstock positions. “The changing external environment meant that the accepted business model was past its sell-by date and we could not sit back and hope the markets would change back in our favour,” says Carlson. “Instead we took the opportunity to rethink our business and implement a long term fix for some of the underlying issues.”

A Big Turnaround in Performance

The fix involved rapid and substantial changes to the base chemicals asset configuration, supply chain and contracting strategy. Just two years down the line, the changes have produced a big turnaround in performance.

“As a result of the desire and determination of people from across the business to drive these changes through, we now have a competitive asset footprint and cost base that is more closely aligned to the new market economics, and that makes a massive difference,” says Carlson.

“We’re also in a stronger position to exploit opportunities for further feedstock integration with downstream refining, as well as Shell’s expanding upstream gas production in the USA.”

Lighter Feedstocks

At the heart of the changes were improvements to the gas processing capabilities of both the Deer Park and Norco manufacturing sites. “We carried out in-depth strategic reviews at both sites, looked at technical feasibility studies and put all options on the table,” explains Dave Yard, Base Chemicals Feedstock Manager, Americas.

“Like many other producers, we had already started switching to lighter feeds but were constrained to some extent by existing supply contracts for product streams that you only get by cracking liquids, and by our limited capacity for processing lighter gas-based feedstock. We had to find innovative ways to resolve those issues.”

The detailed plans entailed shutting down or modifying assets that were dedicated to processing crude-derived generic liquid feeds, and increasing both sites’ ability to process ethane feedstock.

“It was clear that hardware focused solely on generic liquid feeds could not survive in the new energy world,” says Tom Regetz, Chemicals Projects Development Manager, “but it was challenging to alter some assets that were not designed for gas cracking.”

At Deer Park, Texas, furnaces were modified to enable the site’s two ethylene plants to run on mixed feed slates. “This allowed us to increase the base loading of gas feedstocks from the adjacent Deer Park refinery, as well as source additional lighter feeds in the market,” says Regetz. Work at Deer Park also included a significant investment in a new pipeline to bring additional gas feedstocks directly into the site.

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