Drilling Down

Report: Shell Leases Office Space Near Cracker Site

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MONACA, Pa. – Royal Dutch Shell plans to lease a 76,000-square-foot building near the site of a proposed ethane cracker plant, according to the Pittsburgh Business Times.

The Business Times, citing “an inside source” familiar with the deal, reported Feb. 10 that Shell has reached an agreement to lease the former headquarters of Michael Baker International in New Brighton, Beaver County. The building includes a 400-car parking lot, the newspaper said.

The building is near the Horsehead Zinc site in Potter Township where Shell is considering building a $3 billion ethane cracker plant.

Shell has not confirmed whether it would move forward with the project.

However, the company continues to perform pre-construction work and make infrastructure improvements at the site on the Ohio River near Monaca.

If built, the cracker plant would accept ethane gas from wells drilled in the Marcellus and Utica shale plays in Pennsylvania and eastern Ohio and then convert this gas into ethylene and polyethylene, a base ingredient used in the plastics industry.

Construction on the project could employ as many as 10,000 building trades jobs and once in operation, the cracker would require 500 full-time positions.

Two weeks ago, Shell CEO Ben van Buerden said on a conference call with analysts that the corporation would likely step up investment in its downstream business this year, “predominantly really in petrochemicals.” That business segment would include the proposed Monaca plant.

This year, Shell noted it would spend about $7 billion on downstream this year, whereas historically it spends bout $5 billion.

While Shell has cancelled billions of dollars worth of other projects as it wrestles with the dismal oil and gas market, the Monaca plant still remains on the radar as a potential project. A chart on an investors presentation found on Shell’s website shows that the company had deferred or delayed its decision on the cracker plant, identified by an arrow pointing to sometime early this year.

Published by The Business Journal, Youngstown, Ohio.