Shell Polymers aims to have its major new U.S. petrochemicals complex near Pittsburgh up and running by the end of 2022.
"In our chemicals and products business, the main contributor to [capital expenditures] is our finishing up the Pennsylvania chemicals project … which will be hopefully up and running by the end of the year," Royal Dutch Shell Chief Financial Officer Jessica Uhl said during a Feb. 3 conference call with stock analysts.
The Shell plant in Monaca, Pa., will have more than 3 billion pounds of annual polyethylene production capacity. Market watchers had expected production to begin in the first quarter of 2022, but work had been delayed because of conditions related to the COVID-19 pandemic.
Shell chose the site because of its access to the Marcellus and Utica shale-based natural gas deposits. Natural gas can be converted into ethane and then into ethylene and PE resin. The site will be the first U.S. PE plant built outside of the Gulf Coast in at least 40 years. Most of the resin made in Monaca is expected to be sold to customers in North America.
In February 2021, Royal Dutch Shell CEO Ben van Beurden had said to "think of 2022" as the timeline for the start of the Monaca complex.
Shell began construction of the 386-acre Monaca site in late 2017. The complex also has an 85,000-square-foot customer innovation center with film extrusion and molding equipment.
Most work at the site stopped in March 2020 due to the pandemic but resumed in May of that year. By October 2020, almost 7,000 workers were at the site. In early 2021, the firm's construction team handed off the control building to Shell Polymers production operators in Monaca.
Shell officials have said that the plant is located near 70 percent of North American PE demand. The firm has installed truck silos and can rapidly load and deploy resin to customers, offering same-day delivery.
Officials previously said that the site will have real-time rail and transit timing, so customers will know where shipments are at all times and plant staff can make real-time adjustments. Being close to customers also will allow Shell to reduce emissions through shorter transit and delivery times, they said, adding that proximity also helps customers who have low inventory levels and just-in-time manufacturing.
In North America, Shell will work with resin distributors Bamberger Polymers Corp., Genesis Polymers and Shaw Polymers LLC to market PE made at the site.
Shell Chemical and Shell Polymers are units of global energy firm Royal Dutch Shell. The business is based in The Hague, Netherlands, with U.S. headquarters in Houston.