Thursday, March 15, 2012

Shell Signs Agreement To Evaluate Beaver County Site For Ethane Cracker Plant

Shell Chemical announced Thursday it has signed a land option agreement with Horsehead Corporation to evaluate a site in the U.S. Appalachian region for a potential petrochemical complex. The complex includes an ethane cracker that would upgrade locally produced ethane from Marcellus Shale gas production.
            The site is located in Potter and Center Townships in Beaver County near Monaca, Pennsylvania.
            Horsehead Corporation signed the agreement because it is moving it zinc production operations out of Pennsylvania to North Carolina.
            “We are moving our zinc production operations to our new plant which is under construction in North Carolina and expected to startup during the third quarter of 2013,” said Jim Hensler, Horsehead President & CEO. Hensler added, “We believe this option provides the best value proposition for Horsehead among the several alternatives we are considering for this site.” The option, if exercised, would require Horsehead to vacate its Monaca site by April 30, 2014.
            This positive development marks another phase as Shell continues to assess the commercial feasibility of a petrochemical complex in the Appalachian region. The next steps for this project include additional environmental analysis of the preferred Pennsylvania site, further engineering design studies, assessment of the local ethane supply, and continued evaluation of the economic viability of the project.
            “We are very pleased to have signed this site option agreement,” said Dan Carlson, General Manager, New Business Development, Shell Chemicals. “This is an important step for the project, and we look forward to working with the communities in Pennsylvania, and gas producers across Appalachia, as we continue our efforts to develop a petrochemical complex.”
            Shell looked at various factors to select the preferred site, including good access to liquids rich natural gas resources, water, road and rail transportation infrastructure, power grids, economics, and sufficient acreage to accommodate facilities for a world scale petrochemical complex and potential future expansions.
            In addition to an ethane cracker, Shell is also considering polyethylene (PE) and mono-ethylene glycol (MEG) units to help meet increasing demands in the North American market. Much of the PE and MEG production would be used by industries in the northeast.
            As an integrated energy company and a leader in worldwide gas technology, Shell has an array of long-term options to monetize natural gas. This includes extracting ethane and other natural gas liquids for petrochemicals production; shipping solutions for LNG (liquefied natural gas); proprietary gas-to-liquids technology to produce fuels, lubricants and chemicals; and LNG for heavy duty vehicles, marine and rail transport.
            “For several months, I have been actively engaged and working with Shell officials, as have members of my cabinet, to get Pennsylvania to this point in the process,” said Gov. Tom Corbett. “Shell now knows what we all do; Pennsylvania is ideal for this project. Not only do we sit atop the richest known reserves of natural gas in the world, but we have a world class workforce, an expansive transportation network including rail, roads and air, excellent education institutions and a thriving quality of life here in Pittsburgh.
            “We are still early in the process, but my administration is determined to see this project through to completion. The benefits to the state’s southwest and to all of Pennsylvania are immense,” said Corbett. “The Shell plant would, if constructed, have the potential to be the single largest industrial investment in the region in at least a generation.”
            Sen. Elder Vogel (R-Beaver) released the following statement: "Today's announcement by Shell is extraordinary for Beaver County and Western Pennsylvania. The purchase of this land option on the Horsehead property has made clear Shell's intention to further evaluate the possibility of locating an Ethane Cracker Facility in Potter and Center Townships.
            "Since taking office, my highest priority has been to make Beaver County attractive to the job creators. In the days ahead, if Shell makes a final decision to locate their facility in Beaver County, the landscape for job creation and the economy of the region will change dramatically.
            "Without a doubt, ensuring a portion of the recently passed Impact Fee on Natural Gas goes toward the development of this project makes the site additionally attractive. If plans for the facility come to fruition, the jobs will come and our economy will prosper. Related industries will grow, as the development and long-term requirements of a cracker facility would be realized.
            "I want to sincerely thank Gov. Tom Corbett for his strident efforts to bring this facility to Beaver County."
            House Majority Leader Mike Turzai (R-Allegheny) said, “This is just great news for western Pennsylvania. This means good-paying, family-sustaining jobs may be coming right here, in our part of the state. Our priority has always been improving Pennsylvania’s jobs climate. And the key to doing that is private sector job growth. 
            “Our EmployPA legislative package has been integral to changing Pennsylvania’s perception to job creators. It is helping make the Commonwealth more economically competitive, enticing more businesses, like Shell, to locate and stay in Pennsylvania.”
            Marcellus Shale Coalition president Kathryn Klaber issued the following statement: “Today’s announcement by Shell is a win-win for the region’s workforce and economy and further demonstrates the tremendous resource contained in both the Marcellus and Utica shale. While located in Pennsylvania, the supply chain and potential economic impact of this project will span the multi-state region while serving as an anchor in the resurgence of the domestic manufacturing sector.
            “As a Beaver County native, it’s particularly gratifying to see that the economic revitalization of the river communities may be just around the corner. This announcement is further indication of the Commonwealth of Pennsylvania and Gov. Corbett’s continued work to responsibly develop the Marcellus and expand broad-based economic benefits for all. This is certainly an exciting day for the natural gas industry, this region and the nation.”
            For more information, visit Shell's Appalachia Petrochemical Project webpage.

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