Shell Chemical has decided in favor of building a massive plastics and petrochemicals complex in the Pittsburgh area.
Construction is expected to start in late 2017, with production beginning “early in the next decade,” officials with Houston-based Shell said in a June 7 news release. When complete, the site is expected to have annual capacity of 3.5 billion pounds of polyethylene resin.
The project will be the first U.S. petrochemicals project built outside of the Gulf Coast of Texas and Louisiana in several decades. It will take advantage of low-priced natural gas feedstock that's been developed in the Appalachia region in recent years. Natural gas for the project will come from the Marcellus and Utica shale regions.
The complex will be located on the Ohio River near Monaca, Pa., about 30 miles northwest of Pittsburgh. “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,” officials said in the release. “The location is also ideal because more than 70 percent of North American polyethylene customers are within a 700-mile radius of Pittsburgh.”
They added that the project will bring new growth and jobs to the region, with up to 6,000 construction workers involved in building the new facility, and an expected 600 permanent employees when completed.
Shell executive Graham van't Hoff said in the release that the Pennsylvania project “demonstrates the growth of Shell in chemicals and strengthens our competitive advantage.” Van't Hoff is global chemicals executive vice president for parent firm Royal Dutch Shell plc.
Shell first announced that it was considering the project in early 2012, but company officials told Plastics News as recently as May that the firm had not made a final decision. Shell had taken several actions to prepare the site for development, including building a heavy-haul bridge across State Route 18 that would allow trucks to reach the proposed site.
Shell also had agreed to spend up to $69 million to move a water intake site from the Monaca location and build a new water treatment site for Center Township. That move would include construction of a dock facility. Pennsylvania state officials already have approved Shell's Act 2 Plan, which allows the firm to improve the environmental footprint of the site.
Most shale-based PE/ethylene projects have been aimed at the Gulf Coast, where three major expansions will open next year. Several other projects have been proposed for the Appalachian region in recent years, but the Shell project in Pennsylvania is the only one to be moving forward.
Officials and market watchers weighed in on Shell's much-anticipated decision. Chris Bezaire, PE vice president with materials maker Nova Chemicals, has seen Shell's progress first hand. He's based at Nova's U.S. headquarters in Pittsburgh, and the firm also has operations in Monaca.
Based on seeing this progress, “there was never a doubt that that this project would proceed, only natural uncertainty as to when the decision would be made and how quickly the work would proceed to ultimate completion,” Bezaire said in an email.
“I believe some people have forgotten how bright the future is for petrochemicals in North America,” he added. “Remember, we have stable government, robust infrastructure, strong economy, advanced technology, high value markets and access to some of the world's lowest cost feedstock. Long term, North America is the place to be.”
Calgary, Alberta-based Nova later this year will open a 1 billion pound-per-year capacity LLDPE line in Joffre, Alberta. Bezaire said that the shale-sourced line will be North America's first in more than a decade and that it will produce “the cleanest, most consistent resin in the market.”