Still No Commitment on a Shell Ethane Cracker in Penna.

by Duane Nichols on June 30, 2013

Horsehead Site, Ohio River, Monaca, PA

No Movement by Shell on Beaver County Site For Thermal Cracking

From the Article by Casey Junkins, Wheeling Intelligencer, June 29, 2013

WHEELING – West Virginia and Ohio leaders pointed fingers at each other in March 2012 upon learning that Royal Dutch Shell would take its multibillion-dollar ethane cracker plant to Monaca, Pennsylvania.

But more than 15 months after Shell officials announced that land owned by the Horsehead Corp. would be the location for the ethane cracker, the global oil giant still has not purchased the property from Horsehead. If built, the project is expected to result in 10,000 construction jobs, hundreds of high-paying chemical jobs and thousands of related development jobs.

The original terms of the deal called for Shell to complete the purchase from Horsehead by the end of 2012. After extending the option-to-buy term to the end of June, Shell and Horsehead announced Friday they would again extend the option-to-purchase term by another six months.

“The site evaluation process for a proposed project of this scale typically takes several years to complete, and we expect similar timing in this case,” said Shell spokesman Destin Singleton regarding the term extension.

For months in 2011 and early 2012, officials in Ohio and West Virginia worked to secure the large petrochemical plant. Ohio Gov. John Kasich flew to Houston, Texas, to meet with Shell officials to try to attract the cracker, while West Virginia Gov. Earl Ray Tomblin actively worked to entice Shell to build in the Mountain State. However, Shell eventually settled on the Monaca, Pennsylvania site along the Ohio River.

Because there is no ethane cracker in the Utica and Marcellus shale regions, some companies are now shipping the product for cracking at facilities in Canada or along the Gulf Coast. The Bluegrass Pipeline project is expected to send 200,000 barrels per day of mixed ethane, propane and butane to the Gulf Coast by 2015, with the capacity to eventually be increased to 400,000 barrels per day.

The Bluegrass would accompany Chesapeake Energy’s plans to send 75,000 barrels of ethane produced from the Marcellus and Utica shale regions for cracking along the Gulf Coast on the soon-to-open ATEX Express pipeline.

Even with all of this ethane slated to be piped away from West Virginia, Ohio and Pennsylvania, officials remain optimistic about landing a cracker plant.

Tomblin said last month in Fairmont, WV that he believed the state was still in contention to get an ethane cracker. Friday, Pennsylvania Gov. Tom Corbett said Shell’s extension of its option agreement with Horsehead is “good news” for his state.

“This project would be the single-largest industrial investment in southwest Pennsylvania in a generation. It will develop a market for the state’s natural gas supply, helping to create new jobs and the prosperity that comes with them,” Corbett said. “A petrochemical facility of this size will result in 10,000 construction jobs, at least 400 direct jobs and more than 10,000 jobs created in chemical and supply chain industries.

“My administration, local officials and economic groups continue to work in support of Shell Chemical as it continues a deliberate evaluation of this project,” he said. “We are all dedicated to ensuring, once built, that this facility is successful.”

NOTE: Aither Chemicals LLC of South Charleston, WV, has expressed interest in building a catalytic cracking facility to produce ethylene from Marcellus ethane.  This story was recently updated in Plastics News.  A representative of Aither is to speak on “Inside Shale” this coming Tuesday morning during the 9 am hour program.  “Inside Shale” is an hour long advertisement of the WV Oil and Natural Gas Association (WVONGA) aired every week on WAJR in Morgantown.

{ 6 comments… read them below or add one }

Millie July 6, 2013 at 8:06 pm

You know I love your blog!!!


Edwina V. Baird July 9, 2013 at 5:30 am

The ethane cracker plant converts ethane from the abundant Marcellus shale natural gas liquids into chemicals such as ethylene, which is in turn used to produce products such as plastics, tires and antifreeze. A cracker plant closely resembles a gasoline refinery, with large storage tanks and miles of pipe lines.


Celia M Janosik August 30, 2013 at 9:12 am

A world class cracker plant (see Singapore’s) will turn this area into a highly polluted region. It will be far worse than the steel mill era. We will be likened to Louisiana, parts of Texas, and Alabama.

Not only the cracker plant but many subsidiary plants equally polluting the air and water will be built. While every mile or two there will be well pads for drilling up to sixteen wells. Along with equal amounts of condensate tanks, compressor stations along the many miles of pipeline, and cryogenic plants so as to transport the gas.

The Pittsburgh area will never again be #1 place to live or visit, it will revert back to “the smoky city” without visible smoke.


WW September 10, 2013 at 6:24 pm

You mean it was ever the #1 place to live?

It’s actually interesting that you give the example of Singapore when mentioning the “world class” cracker plant. Singapore has good air quality, and the only times when it’s not is when the Indonesians are burning forests to clear land for biofuel production.

Well pads are now much further apart precisely because new completion techniques allow for the construction of multiple wells from a single pad, with each well potentially branching out to multiple laterals. If you’ve seen pictures of the Pennsylvania oil patch from a hundred years ago, you’d understand just how far technology has advanced since then, and how much less impact the industry has on the land now than it did then.

In fact, perhaps in general you need to familiarize yourself with the history of the place where you live. You’d discover that southwest PA was built on a foundation of resource development and industrial activity. What’s now moving in to take the place of the old coal-fired steel industry is much cleaner, and has much higher value added than anything that preceded it.

What you should, however, complain about, is the way the governor is squandering the value of this development to the taxpayer. Even the industry is in shock at just how little it is contributing to the state coffers. This gravy train, like all before it, won’t keep going forever, and PA should do the most with it by investing in its future. Instead, the governor is cutting education spending like it was a burden on taxpayers, not understanding that a better educated workforce pays back that investment in education with dividend. You want to be mad about something – that’s something to be mad about.


Dan September 4, 2013 at 7:00 am

Cry about it……MOVE!


Wynn October 28, 2013 at 11:23 pm

I run a business in Monaca that is just hardly making it. We need these jobs in the area. When are they going to finally make a commitment to Monaca and get started? Ty


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