Petrochemical Plant Site Selection: Know the Numbers
Independent Report from by IHS Markit confirms Shale Crescent USA advantages.
Historically, the Gulf Coast has been the most profitable place to build and operate a petrochemical company. The numbers have always supported that fact.
However, the numbers have changed.
Sitting atop two of the most prolific shale plays in the world, Shale Crescent USA is now the most profitable place to build a petrochemical company.
Five factors support this new realization:
- Abundant Natural Gas Supply
- Access to Water
- Proximity to Market Demand
- Skilled Labor Force
- Cost Advantage
A Comparison: the Gulf Coast vs Shale Crescent USA
Through the breaking news of a recent analytical projection from a trusted global research firm, IHS Markit, these monumental findings have now become a reality.
Cost Advantage Summary
These cost savings simulated over a period of 20 years, from 2020 to 2040, resulted in a net present value cash flow advantage of $713 million, or a pre-tax cash flow advantage of $3.6 billion. In other words, a petrochemical plant located in the Shale Crescent USA would generate a four-times-higher net present value cash flow than a comparable investment in the Gulf Coast.
For more detailed information, download the official executive summary from IHS Markit Research now.
Why Shale Crescent USA? Abundant Natural Gas Supply
- The Shale Crescent USA region sits atop the Marcellus and Utica Shale formations, two of the most prolific shale plays in the world.
- Natural gas from the Marcellus and Utica shale plays accounted for approximately 30% of total U.S. natural gas production in December 2017, and is expected to account for more than 40% of the nation’s production by 2030
- If the region were a country, it would rank third in terms of natural gas production, surpassing Saudi Arabia, Iran and Qatar, and trailing behind only the entire U.S. and Russia.
- Due to its vast supply, natural gas prices within Shale Crescent USA are now the lowest in the developed world.
- Lower demand, has driven ethane prices in the Shale Crescent USA to be 32% lower than on the Gulf Coast.
- Because of lower natural gas feedstock costs, ethylene, a component of natural gas, cash costs in the Shale Crescent USA are 23% lower than on the Gulf Coast.
- Polyethylene (plastic pellets) cash costs are 16% lower in the Shale Crescent USA than on the Gulf Coast, and delivered costs are 23% lower, since the supply is closer to end users
These low prices, coupled with the extensive supply of natural gas, position companies within this area for optimal profit.
Why Shale Crescent USA? Access to Water
The Shale Crescent USA region sits inland with ample room for large manufacturing complexes, but still provides convenient access to large waterways, such as the Ohio River and its many tributaries.
Why Shale Crescent USA? Proximity to Market
Facilities located in the Shale Crescent USA can avoid incurring shipping costs to and from the Gulf Coast.
Businesses in the Shale Crescent USA have a significant geographic advantage due to the following:
- Within one day’s drive to 50% of high-demand North American markets
- Within one day’s drive to 70% of polyethylene demand
- The lowest natural gas prices within the developed world
The Marcellus and Utica Shale plays have opened up a revolution in the energy industry.
For the first time in history, companies can now position themselves directly within the greatest region of supply as well as the greatest area of demand.
Companies that understand the dramatic cost savings that will be realized through a more strategic site selection, will position themselves for greater profits.
Why Shale Crescent USA? Skilled Labor Force
With one of the lowest employee turnover rates in the country, the Shale Crescent USA fosters a world-class workforce, combining a storied history of manufacturing and a world-renowned, forward-thinking plastics manufacturing industry.
Why Shale Crescent USA? Cost Advantage
From low feedstock cost to less delivery cost, all of these important factors combine to deliver an unprecedented cost savings for a petrochemical plant that selects Shale Crescent USA as their site location.
The Bottom Line: The Revolution Has Started. Act Now.
These numbers are no longer a small drop in the ocean of commerce. They represent a wave of revolution that you cannot afford to ignore.
The revolution has already started.
The most profitable place to build a petrochemical plant has changed.
Will you change with it?
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