Shell Plant Not the Only Cracker in the Pipeline

POTTER TOWNSHIP, Pa. -- It is as close to a sure thing without being officially confirmed.

It’s expected that Shell Chemicals will construct an ethane cracker plant in this township, near Monaca.  Most people think an announcement could come early next year and some have speculated that an announcement could be made next month around election time.

Gov. Tom Corbett, who is running for re-election, has said repeatedly he is bullish on the project, but has declined to comment further because he is under a confidentiality agreement.

The proposed $2.5 billion refinery – announced more than two years ago – would convert ethane from Marcellus shale into ethylene, a feedstock for the petrochemical industry, and then into polyethylene, the main building block of plastics used in everyday life.

A spokesman at Shell’s U.S. headquarters in Houston says the site remains under review and once that review is complete, Shell will make an announcement about whether it plans to proceed with the project.

The Beaver County plant, which would be constructed on the former Horsehead Corp. site, would employ 400 people and could employ as many as 10,000 construction workers. Shell has already applied for an air-quality permit and has contracted for ethane shipments with Consol Energy Inc. Consol is drilling 45 wet gas wells on six pads on 9,000 acres at the Pittsburgh International Airport.

Joe Spanik, a Beaver County commissioner, said his county is working on putting the proper infrastructure in place, such as widening roads and pipelines, for the refinery.

“We had no infrastructure in place,” he says.

Given the amount of wet gas being extracted from both the Marcellus and Utica shale plays, petrochemical companies are beginning to see a glut of ethane on the market and are looking into the possibility of developing cracker plants.

Besides Shell, cracker plants in the planning stages include Appalachian Resins Inc.’s recently announced plans for a $1 billion refinery in Ohio on a 50-acre site along in Salem Township, Monroe County, that sits next to the Ohio River.

Originally, the plant was going to be constructed in West Virginia, the company said. That plan changed when the size of the plant was increased. Company officials believed the Ohio  site could better accommodate a larger palnt, which could be operating by 2019. Plus, rail service at the site was better, the company said.

In Parkersburg, W.Va., Odebrecht Organization, a Brazilian petrochemical company, has proposed constructing the Appalachian Shale Cracker Enterprise, dubbed Ascent.

This project, planned for Washington, W.Va., 10 miles outside of Parkersburg, would include an ethane cracker plant, as well as three polyethylene plants.

And in Allenport, Washington County, 40 miles south of Pittsburgh, PTT Global Chemical of Thailand and Marubeni Corp., a Japanese trading and investment house, are looking at the former site of Wheeling Pittsburgh Steel Chemical as a possible location for a cracker plant. The site is next to the Monongahela River and is accessible by rail.

“This would not be in competition with Shell,” said Larry Maggi, a Washington County commissioner. “We are anticipating that it could be a satellite facility [of Shell].”

“We support what is going on in Beaver County,” Maggi added.

Callie Colbe, an analyst with Denver-based Bentek Energy LLC, an energy market analytics company, said the interest in developing cracker plants is being driven by the amount of natural gas being extracted from Marcellus and Utica shale plays.

“It is because there is so much production in the Northeast,” said Colbe, explaining there are three options for the ethane. It can either placed back into the natural gas pipeline. It can be exported, or refineries can be built to process it for market, she said.