The role the Gulf Coast’s petrochemical refinery industry plays in the development of the global economy is not only key, said Lori Ryerkerk, executive vice president of global manufacturing at Shell Oil, but is also the “heart of the oil and gas business” whose influence impacts all other industries throughout the world.
“If you look at petrochemicals, this industry is seen as consistently high growth around the globe, especially in polymers and basic chemicals and is certainly higher than the growth we’ve seen in natural gas and oil,” Ryerkerk said.
Despite commoditization, there are “a lot of ways” within the petrochemical sector to create value, including the continuing introduction of more competitive technologies, she explained.
Exponential growth in natural gas production largely based on the introduction of technology, horizontal drilling and hydraulic fracturing have created access to cheap oil and gas from previously inaccessible formations, Ryerkerk said. The result is a boom in investment for refineries and petrochemical plants.
“There is a tremendous opportunity in petrochemicals. The margin environment we make in petrochemicals suggests it’s a good business to be in,” Ryerkerk continued. “Manufacturers have to work smarter and faster while still holding on to our core values around safety and operational excellence. If we do that we can be highly competitive here in the U.S. and in the Gulf Coast.”
Addressing the 2014 Petrochemical and Maritime Outlook Conference, Ryerkerk noted refineries along the Gulf Coast are particularly profitable due in part to pipeline expansions that increase the flow of crude to the area.
“There are great opportunities in the Gulf Coast,” Ryerkerk said, adding more than 40 percent of the U.S.’ total petroleum refinery capacity and 30 percent of its total natural gas processing plant capacity sit in the Gulf Coast.
“It is no coincidence Shell has two very large refineries here in the Gulf Coast,” Ryerkerk said, indicating the region’s abundant pipelines, waterways, terminals and rail providers contribute to a transportation infrastructure that makes the region even more attractive. “We’re in the Gulf Coast because we think this is the region of the world where we can win,” she said.
Ryerkerk referred directly to the development of Shell’s Motiva Port Arthur, Texas, complex, the largest refinery in the U.S., as well as Shell’s Deer Park, Texas, operation, calling it “a great facility that really is a microcosm of the approach we are using on our refining journey at Shell.”
Established in 1929, Shell’s Deer Park facility is a fully integrated refinery spanning a 1,500-acre site in the Houston Ship Channel with more than 3,000 employees and contractors. Despite refinery shutdowns and scale-downs impacting the rest of the world, the Deer Park facility is continuing to grow.
“The site refines 340,000 barrels a day of crude, produces base chemicals and other raw material chemicals and is a major integrative petrochemical hub,” Ryerkerk said. “Deer Park is actively optimizing its assets, including its stocks and its tankage, to ensure the flexibility to process all of the advantaged crudes that are now available in North America.”
Shell’s “strong leadership” is building a dynamic culture at Deer Park and all of its facilities where employees and contractors run “a safe, reliable and flexible kit,” supported by “a true understanding of the part they play in making the site profitable,” Ryerkerk concluded. “This site takes pride in the fact it is making a very positive contribution to the economy of this community they work and live in,” she said. “ That is the future of our industry.”
For more information, visit www.shell.us or www.allianceportregion.com.
