Communicator

Shell Geismer Chemical Plant (credit: Shell)

Shell, the global energy giant, is reportedly considering a significant restructuring of its chemical business, potentially  divesting operations in the United States and Europe while simultaneously expanding its joint venture presence in China.

According to industry sources, Shell is in the early stages of evaluating strategic options for its chemical assets in Western markets. The potential sale would mark a major shift in the company's portfolio strategy, moving away from regions facing higher energy costs and stricter regulatory environments.

In the United States, Shell operates several major chemical manufacturing facilities, including its massive petrochemical complex in Deer Park, TX, and chemical complexes in Geismar and Norco, LA., and Monaca, PA., where it says it stabilized production in 2024.

These facilities produce ethylene, propylene, and various specialty chemicals that serve as building blocks for consumer goods ranging from automotive parts to household products. The company also maintains research and development centers in Houston that have been instrumental in developing new chemical technologies and processes.

The company's Pennsylvania petrochemical complex in Beaver County, known as the Shell Polymers Monaca plant, could be among the assets on the chopping block. This $6 billion facility, which began operations in November 2022 after years of construction, is one of the largest of its kind in North America. The plant converts ethane from the Marcellus and Utica shale formations into polyethylene pellets used in plastics manufacturing. If sold, it would represent a stunning reversal for a project that was heavily subsidized with an estimated $1.65 billion in state tax credits and had been heralded as a major economic development win for the region.

Shell's European chemical operations are equally substantial, with major production sites in the Netherlands, Germany, and the UK. The Moerdijk facility in the Netherlands stands as one of Shell's largest European chemical plants, producing base chemicals and intermediates. In Germany, the Rheinland complex integrates refining and chemical production. Shell also operates chemical plants in Rotterdam, NL.

While scaling back in traditional markets, Shell appears to be doubling down on its Chinese joint venture with CNOOC, known as CNOOC and Shell Petrochemicals Company Limited (CSPC). The company is reportedly planning to expand this partnership, reflecting Shell's growing focus on Asian markets where demand for petrochemical products continues to rise steadily. The existing CSPC complex in Huizhou, Guangdong Province, is one of China's largest petrochemical facilities and has been operating since 2006.

"This dual approach of divesting in mature markets while expanding in growth regions aligns with broader industry trends," said an industry analyst familiar with the matter. "Many Western chemical producers are reevaluating their global footprints in response to shifting economic realities."

Shell's chemical division manufactures a range of products including ethylene, propylene, and other base chemicals used in everything from packaging to automotive components. The business has faced challenges in recent years due to volatile feedstock prices, increasing competition from Middle Eastern and Asian producers, and growing pressure to reduce environmental impacts.

The company has not officially confirmed these plans, with a spokesperson stating only that "Shell regularly reviews its  portfolio of assets to ensure alignment with our strategy." If Shell proceeds with these changes, it would join several other major  chemical companies that have restructured their operations in  recent years to focus on specific regions or product segments  where they see the greatest competitive advantage.

Industry observers note that any divestment would likely attract interest from private equity firms or chemical companies looking to expand their presence in established markets. Meanwhile, the expansion in China underscores the continued  importance of the region as a growth driver for the global  chemical industry.

The timeline for any potential sale remains unclear, though sources suggest Shell may begin formal processes within the next several quarters if internal reviews confirm this direction.

#shell #chemicals #divestment #westernoperations #chemicalplants #china

The Shell Geismar Chemical Plant has been added.

#shell #geismar  #chemicals  #chemicalplant 

Dow Polyurethane Technologies

January 30, 2025 | Midland, Michigan (Dow Inc.)

Dow, a global chemical giant, has initiated a comprehensive review of its European assets, focusing primarily on its polyurethane business. This decision comes as the company navigates persistent economic challenges and a complex regulatory environment in the region.

The review will assess the competitiveness of key facilities producing methylene diphenyl diisocyanate (MDI), propylene oxide, and polyether polyols—assets that generated approximately $2.9 billion in annual sales in 2023. Dow aims to optimize value through its "best-owner" strategy, with plans to complete the evaluation by mid-2025.

Jim Fitterling, CEO of Dow, emphasized the importance of adapting to market conditions while maintaining a value-driven approach. He noted that selling assets rather than closing them could align better with the company's long-term objectives.

This move reflects broader industry trends as other chemical companies reevaluate their European operations due to high production costs and stringent regulations.

Despite these challenges, Dow remains committed to strengthening its global portfolio while addressing regional complexities, reporting stable performance globally with its third-quarter 2024 sales rising modestly by 1%.

#dow  #chemicals  #polyurethane  #polyols  #mdi  #europe  #assets 

Datails about SINOPEC Hainan Refining and Chemical Co., Ltd. and Danzhou complex have been updated.

#sinopec #danzhou  #refining  #chemicals  #steamcracker  #ethylene  #china  

Picture: Indian subcontinent refineries, via ppPLUS

India’s dependence on imports to meet its requirements of basic petrochemicals, including polymers, is only expected to rise, despite projects – under implementation and on the drawing boards. This is partly because the historical baggage of poor capacity builds will take time to catch up with rising demand.

In the last few years, however, India’s public sector refiners have climbed on the petrochemicals bandwagon, seeking value-added outlets for refinery streams. They have invested in aromatics (for feeding the polyester value chain), propylene (for polypropylene, PP, and some other chemicals notably, oxo-alcohols and acrylate monomers), linear alkyl benzene (LAB), a key detergent raw material, and a few other projects. And more are to come in the near-term.

There are several commonalities amongst the firm projects. For one, the emphasis seems to be on building the C3 (propylene) value chain. This is not surprising as FCC propylene offers a simple, low-cost route to the olefin and one that can be conveniently retrofitted into existing refinery operations. There is also an overwhelming emphasis on PP production, which may not be wise, as it runs the risk of overbuild should demand growth not pan out as anticipated.

There are other propylene derivatives that can be considered, and these merit attention if not by the refiners themselves then by third party investors for whom it will be more worthwhile. Much will hinge on the commercials of the olefin supply arrangement, but such business models are widely followed, including here in India, let alone in other countries.

Importantly, the government needs to recognise that the chemical industry as a key enabler of modern living, and not a nuisance to be constrained through regulation and red-tape. The priority must be on developing well-developed clusters where not just the petrochemical industry, but also the broad chemical industry – including the fine and specialty chemical industries, wherein India’s competitiveness is well recognised – can locate and start operations in double-quick time. Clusters are efficient and safe locales where the industry can thrive, as several countries have amply shown.
 
India needs a much larger and more diversified chemical industry than it has now. The former it seems is happening. Not so sure of the latter. The herd mentality to investments needs to change. Those who have dared to do so – and there are a few examples – have been amply rewarded. More need to emulate, not imitate, them!

Ravi Raghavan, 12 Nov 2024, Linkedin post.

#india  #petrochemicals  #chemicals  #valuechains  #propylene  #fcc  #refinery  #polyester  #aromatics  #olefins  #polypropylene  #acrylics  #lab  #chemicalindustry  #indianchemicals  #IOCL  #BPCL  #HPCL  #RelianceIndustries  #investment  #specialitychemicals  #finechemicals  #oilrefining  #polymers  #ethylene  #competitiveness 

Xinjiang Chemicals information details and site's location have been updated.

Simandjoentak, LanceSimandjoentak, Lance

Nova Chemicals Joffre site has been created.

#canada #joffre  #nova  #chemicals  #cracker  #steamcracking  #polyethylene  #ethylene