Shell is set to create the world’s largest production facility for the polyethelene Alpha Olefins (AO) after it confirmed it will expand its chemical manufacturing site in the United States.
Shell will construct a fourth AO unit, adding 425,000 tonnes of capacity at its plant at Geismar, Louisiana, becoming the world’s largest.
The chemical site is used in the production of stronger and lighter polyethylene plastic for packaging and bottles, as well as engine and industrial oils and drilling fluids.
The global Alpha Olefins market is set to be worth $10.7billion by 2020, according to recent research by Radiant Insights in the United States. Increasing polyethylene demand for use in plastic production is anticipated to drive market growth.
“This important investment demonstrates our ongoing commitment to the growth potential in chemicals,” said Graham van’t Hoff, executive vice president forShell’s global chemicals business.
“With the investment in new, profitable facilities, Shell Chemicals is well placed to respond to increased global customer demand for linear alpha olefins. We have strong technology, advantaged ethylene feedstock from nearby Norco and Deer Park sites, and operational flexibility to allow us to respond to market conditions.”
Construction of the new unit will begin in the first quarter of 2016. The new capacity brings the total AO production at Shell’s Geismar site to more than 1.3 million tonnes per annum; the site, with a strong track record of reliable and safe performance, also produces alcohols, ethoxylates, ethylene oxide and ethylene glycols.
The global alpha olefin market size was estimated 3.82 million tons in 2013 and may register 5.16 million tons by 2020 growing with an estimated CAGR of 4.4% from 2014 to 2020, according to Radiant.
AO is used in variety of industries ranging from agriculture, the motor industry and oilfield exploration and production.
In addition to Geismar, Shell produces AO at Stanlow in the UK, operated by Essar Oil (UK) Ltd on Shell’s behalf as part of an integrated oil refinery and petrochemicals site.
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