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Shell Scores 'Victory for U.S. Manufacturing' in Pennsylvania
June 07, 2016

After a multi-year review, Shell Chemical Appalachia LLC announced Tuesday that it has taken the final investment decision to build an ethylene cracker and polyethylene derivatives unit along the Ohio River approximately 30 miles northwest of Pittsburgh, Pa. The much-anticipated project is expected to create up to 6,000 construction jobs and 600 permanent positions.

"Shell Chemicals has recently announced final investment decisions to expand alpha olefins production at our Geismar site in Louisiana and, with our partner CNOOC in China, to add a world-scale ethylene cracker with derivative units to our existing complex there," said Graham van't Hoft, executive vice president for Shell's global Chemicals business in a written statement. "This third announcement demonstrates the growth of Shell in chemicals and strengthens our competitive advantage."

The complex will use low-cost ethane from Marcellus and Utica basin shale gas producers to manufacture 1.6 million tonnes of polyethylene (PE) per year, according to Shell. PE is used in food packaging, automotive components and numerous other products, stated the company, which added that more than 70 percent of North American PE customers are located within 700 miles of Pittsburgh.

Shell's decision to build the complex, which will be located off Interstate 376 in Butler County, is a "victory for U.S. manufacturing," noted Dennis Yablonsky, CEO of the Pittsburgh-based Allegheny Conference on Community Development. "We believe that a capital investment of this magnitude indicates to other companies in the energy, petrochemical and plastics industries that southwestern Pennsylvania should be on their shortlist of locations for new facilities and expansions."

"The decision by Shell … will have huge long-term benefits for our entire region, and is good news for the natural gas industry and great news for Pennsylvania's economy," stated Louis D. D'Amico, president and executive director of the Pennsylvania Independent Oil & Gas Association.

"Shell's decision to move forward with this world-class facility, which will put thousands to work across our region through utilizing clean-burning domestic natural gas for decades to come, is welcomed news, especially given the challenging market conditions," said David Spigelmyer, president of the Marcellus Shale Coalition.

Shell in June 2011 first proposed building a world-scale petrochemical complex in the Appalachian region to process ethane produced from shale gas into ethylene, a key petrochemical building block. On March 15, 2012, Shell Chemical signed a land option agreement with Horsehead Corp. for a former zinc smelter site near Monaca, Pa. In November 2014, Horsehead announced that Shell had exercised its option to buy the site. Throughout its multi-year review, Shell considered the merits of the project based on various environmental, engineering, economic and other considerations.

Shell expects major construction to start in approximately 18 months, with commercial production anticipated early in the next decade. The Pennsylvania facility will be Shell's fourth major petrochemical complex in the U.S.; the company currently owns and operates plants in Deer Park, Texas, and Geismar and Norco, La.

Source: Downstream Today

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