Shale gas is driving investment in the US, and it shows no signs of letting up. The American Chemistry Council says US chemical investment linked to shale gas has now topped $100 billion. And INEOS is among those parting with their money.
INEOS has built one of the largest ethane-cracking furnaces in the world to take advantage of America’s low-cost shale gas.
It has invested $115 million in a new furnace at the 2,400-acre Chocolate Bayou Works manufacturing complex in Texas to produce competitive ethylene, a chemical that is used by manufacturers to make everything from soaps to paint to clothes to plastic bottles to cosmetics.
“This now means we won’t lose capacity every time we have to take down one of the other six furnaces to clean them,” said Dennis Seith, CEO INEOS Olefins & Polymers USA. “That, in turn, improves our overall reliability.”
INEOS now operates the second largest ethylene site in the US and the fifth largest in the world, and thanks to state-of-the-art technology, the new furnace has lower environmental impact.
“It produces lower emissions per ton of ethylene production and employs the best available industrial technology for emissions control in the industry today,” said Dennis.
INEOS began planning to build the furnace in mid-2011. It was started up in April this year, 28 months after the first construction contract with KBR was signed.
The project swallowed more than 564,000 construction man-hours – the equivalent of 60 years – during which time construction workers installed eight miles of new piping and 26 miles of new electrical and instrumentation cable.
“It was a tremendous result and one that was delivered safely,” said Dennis. “It also secures the future of our site for the next generation.”
The American Chemistry Council says US chemical investment linked to shale gas had now topped $100 billion.
As of February this year, 148 projects including new factories, expansions and process changes to increase capacity, had been announced.
“This is an historic milestone for America’s chemical industry and proof that shale gas is a powerful driver of manufacturing growth,” said ACC President and CEO Cal Dooley. “Thanks to the shale gas production boom, the United States is the most attractive place in the world to invest in chemical and plastics manufacturing. It’s an astonishing gain in competitiveness.”
INEOS’ new furnace will add up to $55 million profit to the bottom line every year.
“This has all been part of our plans to add capacity to take advantage of ethane produced from US shale gas and is consistent with our long-term strategy to improve site scale and ability to access low-cost ethane feedstock from shale gas,” said Dennis.
The good news for American investment, though, does not end there.
In August INEOS and Sasol finally reached an agreement to build a new plant together to produce 470,000 tons of high-density polyethylene a year at LaPorte, Texas.
The plant will be built at INEOS’ Battleground Manufacturing Complex and should be operational by 2016.
“This investment will allow INEOS to meet our customers’ needs for additional bimodal products,” said Dennis. “It also supports INEOS’ strategy to invest and to capture synergies on our major sites.”
The 50/50 joint venture, which was initially discussed by the two companies in July 2013, will use Innovene™ S process technology licensed from INEOS Technologies.
The ethylene needed for the production of the high-density polyethylene will be supplied by INEOS and Sasol in proportion to their respective ownership positions.
“This project will expand Sasol’s presence in the global chemical market and complement our North American growth strategy,” said Fleetwood Grobler, Sasol group executive for global chemicals. “Its location offers several benefits, including access to US Gulf Coast infrastructure and proximity to our proposed ethane cracker and derivatives complex in Southwest Louisiana.”
Access to vast new supplies of American natural gas from shale deposits is one of the most exciting domestic energy developments in decades, particularly
for the petrochemical industry.
The International Energy Agency believes the US will be self-sufficient in natural gas production by 2015 and oil production by 2035.
And in May this year Energy in Depth said CO2 emissions in the United States were now at their lowest level for 20 years.