Shell ‘extremely active’ at Horsehead Plant; Possible Cracker Plant Site

by Duane Nichols on November 6, 2013

Shell studies ethane cracker site on Ohio River in western PA
Article by Paul J. Gough, Pittsburgh Business Times, Nov. 5, 2013

Shell continues to have what Horsehead Holding Corp. calls an “extremely active” presence at the soon-to-be-closed Horsehead zinc plant in Beaver County as the conglomerate decides whether to build a petrochemical plant there.

Shell had “70 people crawling over the facility in the last week,” Horsehead CEO Jim Hensler told analysts on a conference call Tuesday reporting Horsehead’s third-quarter earnings. “They’re still actively involved.”

Shell announced in 2012 that it was looking to locate an ethane cracker at the Horsehead factory on the Ohio River in Potter Township near Monaca. While Shell has yet to make a final decision on the petrochemical plant, it has extended the option with Horsehead (Nasdaq: ZINC) until early January.

Hensler didn’t have much else to say about Shell. “We haven’t really had much news to report on it,” he told analysts when asked about it.

One thing is for certain: Horsehead won’t be producing zinc at the Potter Township plant after the end of the year or early next year. It’s set to open a state-of-the-art plant in North Carolina and close the zinc smelters in Beaver County. It sent a 60-day notice to workers there that the plant would be closing the six furnaces at Monaca.

“Some employees have decided to take jobs elsewhere” in anticipation of the plant’s closing, Hensler said. The North Carolina plant should begin operation by the end of the year.

But Horsehead also said it might continue zinc smelting at the facility for up to eight weeks on a few furnaces into 2014 for an overlap with the new plant to consume any remaining material.

“We may end up having a workforce of 30 to 40 people we may keep on site for several weeks, six weeks, eight weeks, to help with that decommissioning process,” Hensler said.

 Shell opened the bidding process for companies to supply ethane and took bids through October 4, or beyond. The company has deals with Consol Energy Inc., Hilcorp Energy Co., Noble Energy Inc. and Seneca Resources Corp., among others.

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