Shell Chemical LP will increase production of linear alpha olefins (LAO) at its manufacturing plant in Geismar, La., adding 425,000 metric tons per year to bring its total LAO capacity to 1.3 million t/y.
Construction of this fourth LAO unit in the Louisiana plant will begin in the first quarter of 2016. LAO is the building block chemical for polyalphaolafin (PAO), which is used in making a range of lubricant products including motor oils, industrial oils, additives and drilling fluids.
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According to a Shell spokesman, the companys effort to increase production responds to current market conditions for LAOs, and the expansion allows for further monetization of advantaged feedstock, responding to strong alpha olefins customer demand in the U.S. Gulf Coast.
PAO molecules are made by assembling LAOs into longer chains. Chemists can use decene (C10), octene (C8) and dodecene (C12), or a blend of these, to reach the molecular weights and performance targets their customers want.
Consultant Geeta S. Agashe, president of Geeta Agashe & Associates LLC, told Lube Report that the expansion of Shells Geismar plant will lead to more availability of decene for making PAO, which is API Group IV base stock.
Agashe mentioned that approximately 20 percent of worldwide LAO production is decene.
Shell does not manufacture PAO, but sells LAO to PAO manufacturers such as ExxonMobil Chemical, Ineos Oligomers, Chevron Phillips Chemical and Idemitsu, Agashe noted.
Chevron Phillips Chemical last year started construction of its own 100,000 t/y expansion of LAO, which it calls normal alpha olefins (NAO), at its Cedar Bayou, Texas plant. The company also has announced a 10,000 t/y increase in PAO production capacity at Cedar Bayou, adding to the 48,000 t/y it currently makes.
Ineos is also expanding LAO and PAO capacity at its facilities in La Porte, Texas and Joffre, Alberta, Canada in 2016. Additionally, Ineos said in March it had completed the early engineering phase for a 350,000 t/y LAO unit it plans to build on the U.S Gulf Coast, with opening expected late in 2017.
Global demand for PAOs is around 440,000 t/y, which is largely used for automotive and industrial lubricant applications, Agashe estimated.
After facing significant competition from API Group III based formulations, PAOs are now making a strong comeback as the best synthetic motor oil formulation, and also in industrial applications such as wind turbine gear oils and others, Agashe explained.
Stephen B. Ames of SBA Consulting, Pepper Pike, Ohio, on the other hand, noted that only about 12 percent of the broad LAO spectrum is used as feedstock for PAO. Although Shell is the worlds largest producer of LAO, they do not make PAO, Ames told Lube Report. The drivers for LAO expansion are primarily for other uses, including detergents.
Shells Geismar chemical plant is located next to the Mississippi River, about 20 miles south of Baton Rouge. It is a stand-alone chemicals manufacturing plant that also produces alcohols, ethoxylates, ethylene oxide and ethylene glycols.