Breaking News: Shell Says It Will Build Cracker Plant

MONACA, Pa. — Shell Chemical Appalachia announced today that it will indeed build a $4 billion ethane cracker plant at the site it’s preparing here in Beaver County.

In announcing its decision to go forward with the massive project, the company described the project as “a major petrochemicals complex, comprising an ethylene cracker with polyethylene derivatives unit.”

Shell said main construction will start in approximately 18 months with commercial production expected to begin early in the next decade.

The facility will be built on the banks of the Ohio River in Potter Township, Beaver County, about 30 miles northwest of Pittsburgh. Shell selected the 340-acre site, the former Horsehead zinc plant,  in 2012 and purchased it two years later for $13.5 million.

As a result of its close proximity to gas feedstock, the complex, and its customers, will benefit from shorter and more dependable supply chains, compared to supply from the Gulf Coast, Shell said. The location is also ideal because more than 70% of North American polyethylene customers are within a 700-mile radius of Pittsburgh.

The project will bring up to 6,000 construction jobs while building the plant and an expected 600 permanent jobs when it is completed and operating.

“This announcement by Shell has the potential to be a game-changer not just for Beaver County, but for the entire region,” the Beaver County Board of Commissioners said in a prepared statement.

“I’ve been waiting for this news since Shell announced Beaver County as the preferred site location four years ago and I’m glad this day is finally  here,” said Commissioner Tony Amadio. “The positive impact this will have for family-sustaining jobs and economic development is incredible. … I don’t think we can overstate what this means for Beaver County’s future.”

Hilcorp Energy Co. is among the operators of natural gas drilling rigs in the Marcellus and Utica shale plays that have agreed to provide Shell with ethane for its plant. Hilcorp operates wells in Poland Township, Ohio, as well as in Lawrence County, Pa.

Ethane comes from wet natural gas, the production of which has been curtailed in the region with the drop in oil and gas commodity prices.

Graham van’t Hoff, executive vice president for Royal Dutch Shell plc’s global Chemicals business., noted in today’s announcement that Shell Chemicals “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.

“This third announcement demonstrates the growth of Shell in chemicals and strengthens our competitive advantage.”

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