Shell inks deal for US Appalachian petrochemical project location
This story was updated Nov. 7 with comments from Shell.
Shell Chemical LP, a subsidiary of Royal Dutch Shell PLC, is moving forward with plans to purchase land near Monaca, Pa., for a proposed petrochemical complex that would process ethane from natural gas produced from the Marcellus shale (OGJ Online, June 6, 2011).
Shell has exercised its option under an amended and restated option and purchase agreement with Horsehead Corp. for Horsehead’s zinc production operation on a landsite in Potter and Center Townships in Beaver County, Horsehead said.
The transaction follows Shell’s original 2012 land option agreement for the site with Horsehead, a specialty zinc producer based in Pittsburgh (OGJ Online, Mar. 15, 2012).
Shell and Horsehead extended the option and purchase agreement, which was initially set to expire by yearend 2012, on three separate occasions to give Shell additional time to continue to evaluate the site, according to a series of releases on Horsehead’s web site.
While Shell has determined that the Monaca site is suitable for the potential development of the proposed complex, the company has not made a final decision to build the project, Shell Chemical spokesman Michael Marr told OGJ via e-mail.
“The land purchase is a necessary step for Shell to advance the permitting process and allows us to proceed with some preliminary site development work,” Marr said, adding that receipt of necessary permits is required before Shell can reach a final investment decision.
“We will make that decision when our full project evaluation is complete,” he said.
The company did not disclose a timeline for completion of the project evaluation, but it did confirm plans to perform some preliminary site development work once Horsehead completes site demolition work.
“This preliminary work would allow Shell to maintain or accelerate the project schedule, if we decide to build the facility,” Marr said.
First announced in 2011, Shell’s Appalachian petrochemical complex would include an ethane cracker with an average ethylene production capacity of about 1.5 million tonnes/year, three polyethylene units with a combined production of 1.6 million tpy, as well as associated installations for power and steam generation, storage, logistics, cooling water and water treatment, emergency flare, and offices, Shell said on a web site created for the project.
Feedstock for the proposed complex likely would be supplied by Shell’s recently reshuffled and newly discovered holdings in the Marcellus and Utica shale regions (OGJ Online, Sept. 3, 2014; Aug. 14, 2014).
Contact Robert Brelsford at [email protected].
