UPDATED — After more than a year of little movement, Shell Chemical LP again is taking steps toward building a major plastics and petrochemicals plant near Pittsburgh.
On June 12, Houston-based Shell bought almost 800 acres of land in Beaver County, Pa., from Horsehead Corp. for $13.5 million. Horsehead previously had operated a zinc operation on the land, and Shell would be able to use existing infrastructure there for its petrochemicals project.
Then, on June 18, the Pennsylvania Department of Environmental Protection issued air and water permits for the project. Preliminary plans filed with the DEP show that the site would have three polyethylene resin production lines with combined annual capacity of 3.5 billion pounds.
The site also would have an ethylene manufacturing line with annual capacity of 3.3 billion pounds, as well as seven ethane cracking furnaces. Shell officials previously had said the site could source ethane from natural gas in the nearby Marcellus and Utica shale regions. Shale gas and oil production from those regions has skyrocketed in recent years through the use of horizontal drilling and hydraulic fracturing.
Numerous resin makers — including Dow Chemical Co. and ExxonMobil Chemical —are at work on PE and ethylene expansion projects, but most of those projects are on the U.S. Gulf Coast, where most North American resin production traditionally has been located.
In a June 23 email, a Shell spokeswoman said that the receipt of the air permit is “a critical milestone” for the project. But she added that although company officials “are pleased that we continue to make progress in our project evaluation,” the permit “doesn't mean we have made a final decision to build the project.”
“We will make that decision when our full project evaluation is complete,” the spokeswoman explained. “This permit is a necessary step that allows Shell to proceed with some preliminary site development work.”
Shell previously communicated plans to perform some preliminary site development work once site demolition work by Horsehead is complete and related permits are in place. This preliminary work would allow Shell to maintain or accelerate the project schedule, if the firm decides to build the facility.
“We are grateful for the strong support this project has received from state and local elected officials, the area's business community and our prospective neighbors,” the spokeswoman said. “We look forward to continuing our engagement with local leaders and residents as we continue our assessment of the proposed facility.”
The project first was proposed by Shell in early 2012. Later that year, Pennsylvania Gov. Tom Corbett signed legislation that could give Shell tax credits worth $1.7 billion or more for 25 years beginning in 2017 if the plant is built.
