A unit of Royal Dutch Shell plc plans to begin construction early next year on a $717 million expansion at its Geismar campus in Ascension Parish, LA, which would make the site the largest alpha olefins (AO) producer in the world.
Shell Chemical LP now has three AO units on its 800-acre Geismar site on the east bank of the Mississippi River. Under the final investment decision announced Monday, the fourth new unit would produce around 425,000 metric tons of AO a year, lifting the Geismar facility's capacity to more than 1.3 million metric tons. The unit is expected to begin operations in 2018.
"This important investment demonstrates our ongoing commitment to the growth potential in chemicals," said Shell's Graham van't Hoff, executive vice president for the global chemicals business. Initial discussions for the project began two years ago. "With the investment in new, profitable facilities, Shell Chemicals is well placed to respond to increased global customer demand for linear alpha olefins."
The AO unit, which began operating in 1967, produces consumer and industrial products, including industrial oils and drilling fluids. It is next to the Mississippi River, about 20 miles south of Baton Rouge, LA.
"Shell remains a vital economic engine in this region and a good corporate neighbor for years to come," Shell Geismar General Manager Rhoman Hardy said.
The project is expected to create a lot of full-time and short-term construction jobs. Overall, the Geismar expansion is set to create 20 jobs with average salaries of $104,000/year, Shell noted. There already are 650 people employed at the Geismar campus. Louisiana Economic Development estimated the project also would generate 93 indirect jobs. An estimated 1,000 construction jobs would be needed at peak building activity.
"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," van't Hoff said.
The Norco, LA facility in St. Charles Parish manufactures lower olefins, including ethylene, propylene and butadiene. Deer Park is a joint refinery/chemicals manufacturing site southeast of Houston along the Ship Channel that makes base chemicals including ethylene, propylene, butadiene and butylene.