Shell isn’t the only company building ethane crackers, which convert natural gas into ethylene and plastics products.
Chevron Phillips Chemical Co. said its industry may spend $30 billion to build U.S. factories that convert natural gas into plastics because shale gas has made American production the cheapest outside the Middle East.
Output from shale formations will yield enough natural-gas liquids such as ethane to support about five new plants that produce ethylene and related plastics, said Mark Lashier, an executive vice president at Chevron Phillips. Each facility will cost $5 billion to $6 billion and will be built over more than a decade, he said on Tuesday in Houston.
The company, a joint venture of Chevron Corp. and ConocoPhillips, is spending $5 billion to build a new ethylene plant in Baytown, Texas, by 2017 as well as two polyethylene plants and related infrastructure, Lashier said. Dow Chemical Co., Sasol Ltd., Formosa Plastics Corp. and Royal Dutch Shell Plc also are studying plans to build new plants, known as crackers, to use the relatively inexpensive gas.