Share This Page

Shell again delaying plans for Beaver County petrochemical plant

| Friday, June 28, 2013, 4:15 p.m.

Shell again delayed its decision to buy land for a petro­chemical plant in Beaver County, officials said Friday.

A Shell spokeswoman and government and civic leaders said the announcement is not a bad sign for the project, a multibillion-dollar plant called a “cracker” that will help turn ethane into plastic.

The company intended to take years to evaluate the site and sought the option to extend its deadline for buying riverside property in Center and Potter, spokeswoman Kimberly Windon said.

“We're still on track. We're still continuing to evaluate the site,” Windon said, noting the company is studying transportation to the site, working on government permits and communicating with people in the county.

Shell struck a deal in March 2012 with Robinson-based Horsehead Holding Corp. for its 300-acre site along the Ohio River. It has an option to buy the land but never fully committed to buy or build on it. The option expired this weekend, but the company received its second six-month extension since December.

Terms of the deal are confidential, both companies said.

State and local leaders have been big boosters for the project because of its economic potential. Industry estimates expect construction to employ as many as 10,000, with 400 permanent employees to run the plant. The billions in investment could open 2,000 to 8,000 jobs at manufacturers that work with the plant's products, according to state and industry estimates.

Some national experts are skeptical of the project, in part because of increasing competition with cheap gas from shale formations such as the Marcellus and Utica. About 10 similar projects are planned for the Gulf Coast and Canada, several of which are more advanced than Shell's. That crowds the market for the products it makes, and could make it difficult to get construction workers Shell needs to build the plant, experts have said.

Other companies doing similar work have sought partners to share in the investment, said Andy Walberer, a chemical industry consultant at A.T. Kearney. Shell would be building in an area isolated from all other petrochemical plants, and figuring out those obstacles may be time consuming, he added.

“They have probably more things to figure out and get comfortable with than they would if they were on the Gulf Coast, because there's kind of nobody else there,” Kearney said. “If you were them, why would you lock into anything before you had to? If there's nobody else competing for this parcel, then there's no downside to waiting.”

To lure Shell here, instead of Ohio or West Virginia, state leaders offered a tax-free zone to build in and potentially more than $1 billion in other tax credits for using ethane from Pennsylvania and selling its products to Pennsylvania manufacturers. Gov. Tom Corbett called Friday's announcment “good news ... another step in Shell's process of evaluating Horsehead as their preferred site.”

The plant would take ethane, a byproduct of gas drilling in the Marcellus shale, and convert it into ethylene. Another plant in the complex could turn that into polyethylene — small plastic pellets — or some other derivative.

Timothy Puko is a staff writer for Trib Total Media.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.