February 18, 2013

Frank Esposito

 

Officials with Shell Chemical LP are still trying to decide if they want to access the shale gas boom and build a plastic feedstock plant in western Pennsylvania.

Pittsburgh-based Horsehead Corp., owner of the parcel of land where Shell has proposed the new plant, announced Dec. 26 it has given Shell a six-month extension to evaluate the site in Monaca, Pa.

Shell officials first announced interest in the project in March 2012, saying newfound supplies of natural gas in the region had led them to consider building an ethylene cracker that would use natural gas-based ethane as a feedstock. Downstream units making polyethylene resin also were being considered, officials said at the time.

In a Feb. 11 email, Shell spokeswoman Kimberly Windon said that the Houston-based firm "continues to consider the possibility of building a petrochemical facility in western Pennsylvania."

"There are many hurdles to clear before we can even make an investment decision to build the proposed petrochemical complex," she added.

"We need to confirm the suitability of the site, secure ethane feedstock supply, complete the engineering and design work, confirm the support of customers for our products, receive all the necessary permits and confirm that the project is economically robust and competitive.

"If the project goes forward, we fully expect to proceed with our preferred site in Pennsylvania, but we must complete a thorough environmental and technical review of the Horsehead location before we can confirm its suitability," she said.

Horsehead currently operates a zinc-processing plant at the site, but plans to close that facility in late 2013 when it opens a new plant in North Carolina. If Shell had exercised its original option on the land, Horsehead would have been required to vacate the site by April 30, 2014. Shell's Windon declined to provide deadline dates for the new option, and Horsehead officials could not be reached for comment.

When asked about the possibility of Shell making PE resin at the site - which is about 35 miles northwest of Pittsburgh - Windon said the firm "is in the preliminary stages of determining what derivatives we would manufacture at the proposed site."

"We are currently exploring different options on what the entire value chain will look like," she said, adding that the firm is looking at "the most efficient means of gathering, processing and extracting ethane, the best technology to convert the ethylene produced by the cracker to poly- ethylene and [PET feedstock] monoethylene glycol and the most efficient means of transporting and selling to customers."

Shell's original announcement surprised some in the industry, since U.S. petrochemical production for decades has been centered on the Gulf Coast in Texas and Louisiana, near existing feedstocks. But the Marcellus Shale - a geological region covering parts of Pennsylvania, Ohio and West Virginia - now is believed to hold one of the largest natural gas deposits on the continent.

Shell already produces ethylene and related feedstocks at U.S. plants in Deer Park, Texas, and Norco, La. The firm hasn't been involved in the PE market since it sold off its ownership stake in Basell NV in 2005.

The ongoing natural gas boom has spurred several North American PE makers - including Formosa Plastics Corp. USA, Chevron Phillips Chemical Co. LLC and Nova Chemicals Corp. - to announce plans for new capacity, mostly at Gulf Coast locations. Dow Chemical Co. also plans to add new ethylene feedstock capacity, but hasn't yet committed to increasing its PE production.

Startup firm Appalachian Resins Inc. also has entered the picture with plans to build a midsized ethylene and PE unit south of Wheeling, W.Va., about 75 miles southwest of the proposed Shell site in Monaca. AR officials plan to release details of that project by the end of the month.

 

 


Copyright 2013 Crain Communications. All Rights Reserved.

(Originally published Feb. 18, 2013, in Plastics News Print Version.)