Shell - Integration Key To Successful Growth

photo : Hydrocarbons Technology

Shell believes that integration is key to delivering what it calls the 'oil chemicals advantage' in its petrochemical facilities.

Downstream Today has reported a recent speech at the recent Petchem Arabia 09 in Abu Dhabi by Aslam Moola, Business Development Manager for Shell Chemicals. Mr Moola cites various examples of projects and existing installations that clearly demonstrate the benefits of integration.

Integration, together with strong project implementation and effective production and energy management, is increasing the competitiveness of plants such as SEPC on Jurong Island, Singapore as well as other integrated Shell complexes around the world, according to Mr Moola.

The Middle East is set to benefit fom this integration. This will be even further enhanced by the development of downstream manufacturing capabilities, such as the polymer parks in Abu Dhabi and the growth of domestic markets in the region.

At International eChem, we have long argued that the critical success factors for petrochemical operations are integration, size, technology, global reach and location. Clearly, all of these factors must be supported by a strong business strategy, together with highly effective delivery of that strategy.

Recent projects in the Middle East and Asia tick all of the boxes and will increasingly dominate supply in the years to come.

Views from EPCA

The European Petrochemical Association (EPCA) meeting is taking place in Berlin this week. Delegates from many companies are taking part and sharing views on the issues affecting petrochemicals and the outlook for the future. Two subjects are dominating discussions. These are the fragility of the current recovery and the likely impact of new Middle East capacity. The consensus is emerging that conditions will remain difficult for some time. Tom Crotty, INEOS Polyolefins CEO, has shared his view that this recession cycle is likely to be U-shaped, rather than the hoped-for V-shaped cycle . There are a number of critical success factors for petrochemical producers; location, technology and scale of assets are very important. Integrated producers have an advantage over non-integrated producers and global reach is essential in order to flexibly supply the best markets. All of these factors undoubtedly give advantage. In addition to this, and reiterating the theme of sevaral recent blog posts, strong and flexible operational management will give the dexterity that is required to manage the peaks and troughs. One thing is sure, there will be many further changes to the manufacturing footprint as we move forward.

Top 100 Feedback

I've had some interesting feedback on the recent top 100 posting, regarding which companies are likely to dominate in the future. Three main themes are emerging.

Companies that are integrated through the entire petrochemical value chain through to commodity polymers/chemicals have a far greater chance of making it to the top 10. This means that the likes of ChemaWEyaat, SATORP and Borouge could join the 'top table'.

Companies with excellent product & application innovation can also be strong. The model followed by DuPont is a good example of this.

Finally, major players could emerge from oil and gas rich states (Russia and Venezuela are good examples), where feedstock is plentiful and cheaper, so further large, integrated facilities could develop.

Whatever the theme, the absolute key to success is to have a clear strategy, backed up by excellent implementation.