Houston-based Shell Chemical said Monday it will expand its petrochemical complex in Geismar, Louisiana to produce more chemicals used in plastics, industrial oils and drilling fluids.
Shell said the expansion will make the Shell Geismar Chemical Plant the largest producer of alpha olefins in the world with the addition of a fourth production unit. The expansion will add 425,000 tonnes of annual capacity, or about 468,000 U.S. tons, creating a total capacity of 1.3 million tonnes, or about 1.4 million U.S. tons.
“This important investment demonstrates our ongoing commitment to the growth potential in chemicals,” said Graham van’t Hoff, executive vice president for Royal Dutch Shell’s global chemicals business, in a prepared statement. “With the investment in new, profitable facilities, Shell Chemicals is well placed to respond to increased global customer demand for linear alpha olefins.”
The expansion is a $717 million investment, according to Louisiana Gov. Bobby Jindal.
The project is intended to capitalize off of cheap and abundant natural gas from the U.S. shale boom that serves as feedstock for the petrochemical plants.
The American Chemistry Council counts 256 announced U.S. petrochemical projects with a cumulative investment of $158 billion from 2010 to 2023. Nearly 65 percent of the funding comes from foreign investment. About 60 percent of the projects are still in the planning stages.
Construction on the Shell expansion will begin in the first quarter of 2016. The plant is located along the Mississippi River in between Baton Rouge and New Orleans. Other companies like BASF and Occidental Chemical Corp. have neighboring petrochemical plants.