New sources of energy

Shale gas

Natural gas has been playing a much greater role in the energy market in recent years, particularly due to the exploitation of shale gas reserves. Through its integrated business model, Linde is participating in this development in a number of ways. The company is meeting demand for facilities to purify and process the shale gas. And lower natural gas prices, particularly in the US, are leading to a surge in construction and expansion of chemical clusters – where oxygen and other industrial gases are in high demand. One such example is the petrochemical site in La Porte (Texas), where Linde is developing the gas supply infrastructure by constructing a large air separation unit and installing a new gasification train for the existing syngas complex. Looking beyond this project, the sharp drop in oil prices in recent months may temporarily squeeze major investments in the petrochemical and natural gas processing industries.

America’s Grand Canal

The Houston Ship Channel is more than just a huge distribution hub. This gateway to the Port of Houston has long since developed into one of the world’s largest petrochemical complexes. Linde is supporting further expansion of this location, contributing engineering expertise and investment in the gas supply infrastructure.

The Houston Ship Channel is more than just a huge distribution hub. This gateway to the Port of Houston has long since developed into one of the world’s largest petrochemical complexes. Linde is supporting further expansion of this location, contributing engineering expertise and investment in the gas supply infrastructure. (Photo)

Petrochemical industry
La Porte (Texas, US)

Building on its pioneering process technologies, Linde is the leading syngas supplier in the Houston region of Texas. (Photo)

Building on its pioneering process technologies, Linde is the leading syngas supplier in the Houston region of Texas.

Anyone wondering whether low energy prices are boosting the North American economy need only sail along the Houston Ship Channel to see the results for themselves. Over 80 kilometres long, this conduit into the Port of Houston (Texas) is the link between the Gulf of Mexico and the stockyards to the south west of the US megacity.

The docklands span over 40 kilometres and are the nation’s largest distribution centre for imported goods. Year after year, thousands of freight and container ships unload more than 200 million tonnes of goods here, making Houston a hotbed of international trade.

The Houston Ship Channel is also home to the largest petrochemical complex in the US – and one of the most important in the world. Numerous international chemical companies operate major production sites in the vicinity, for instance in the cities of La Porte, Baytown and Deer Park.

Linde has been present in La Porte for decades now, steadily modernising its facilities and expanding them to meet rising demand. The latest step here involves constructing a major new air separation unit (ASU) and gasification train. The company will also provide supporting equipment and infrastructure, investing a total of approximately USD 250 m in the La Porte project. The new plants are scheduled to come on stream in the course of 2015.

“Linde is the leading syngas supplier in this region,” states Tom Blades, Member of the Executive Board of Linde AG and responsible for business development in the Americas. “This expansion project will allow us to support our customers at the La Porte petrochemical hub even more effectively. The petrochemical sector is really booming again at the moment, fuelled in particular by the growing development of unconventional gas reserves in the US.”

The new ASU will be the largest of its kind operated by Linde in the US. Adding the new gasification unit will create the world’s biggest natural-gas-based complex for syngas generation and processing. The result will be a fully integrated site for Linde in the Houston area, producing both air gases and syngas products.

The air gases (oxygen and nitrogen) generated by the new ASU will supply the gasification processes in the syngas facilities. Here, natural gas is converted into synthesis gas, which primarily consists of carbon monoxide, hydrogen and carbon dioxide. This can then be used to produce methanol, downstream chemicals and fuels. Linde plans to pipe syngas products to a key customer from the new plant, for instance. Alongside this plant, Linde operates three other syngas generation facilities in La Porte, all built on the company’s leading syngas processing technologies and know-how.

Engineers Chelsey Cabb (left) and Robin Callaghan (right) monitor construction of the new infrastructure facilities on site at Linde. (Photo)

Engineers Chelsey Cabb (left) and Robin Callaghan (right) monitor construction of the new infrastructure facilities on site at Linde.

Linde is investing around USD 250 m in expanding its air gas and syngas production capacity at the La Porte (Texas) site. (Photo)

Linde is investing around USD 250 m in expanding its air gas and syngas production capacity at the La Porte (Texas) site.

“Made in America, again”

Mid-2008

$ 13

Price of 1 million BTU natural gas

USA (graphic)

Start of 2014

$ 4

Price of 1 million BTU natural gas

The title of the International Energy Agency’s current World Energy Outlook says it all. This report shows just how industrial enterprises in the US are benefitting from plummeting energy prices in the wake of the shale gas boom. In mid-2008, one million BTU (British thermal units) of North American natural gas – equivalent to a good 26 cubic metres – still cost USD 13. At the start of 2014, that price had dropped to just USD 4. By contrast, natural gas in Europe costs around three times as much.

For companies, these low energy prices are driving willingness to invest in the US – and German organisations are no exception. Investments in US assets by the German chemical industry have doubled within three years to more than EUR 3 bn.

This growing willingness to invest should further stimulate the US economy as a whole. By 2020, consulting firm McKinsey expects to see the creation of around 1.7 million new jobs that are directly related to the oil and gas sector. The recovery of natural gas and crude oil from shale also has far-reaching effects for the manufacturing industry, as reflected in recent US employment figures. Between 2010 and 2013, over half a million new jobs were created in total – the biggest increase in 15 years.

Shale Gas

Shale Gas (pie chart)

Since 2010, when natural gas recovery from shale began, Linde has received orders worth around USD 3 bn from North America alone to engineer facilities for treating, purifying and processing shale gas.