Shell picks Pa. for shale gas cracker

March 15. 2012 1:00PM - Last modified: March 15. 2012 1:52PM

Tim Stuhldreher

Shell today took the first step toward building an ethane cracker in Pennsylvania, signing a land option agreement on a site north of Pittsburgh.

Shell Chemical signed the deal with Horsehead Corp. for a site in Potter and Center townships in Beaver County. Shell said it chose the site based on its suitability for industrial construction, its proximity to Marcellus Shale drilling regions in southwestern Pennsylvania and eastern Ohio and its access to transportation and energy infrastructure.

An ethane cracker processes natural gas components into feedstock for the chemical industry. Experts have said the project will cost several billion dollars and create thousands of jobs.

Pennsylvania, Ohio and West Virginia were the three states in contention for the project when it was announced last summer. Pennsylvania offered Shell a 15-year tax exemption plus other incentives to secure the cracker, and Gov. Tom Corbett met with Shell officials to press the state's case, according to media reports.

Shell could build other plastics plants along with the cracker, the company said. Shell said it will continue analyzing the site's design and economic potential in coming months.

"We are still early in the process, but my administration is determined to see this project through to completion,” Corbett said in a statement. “The Shell plant would, if constructed, have the potential to be the single largest industrial investment in the region in at least a generation."

Royal Dutch Shell, based in the Netherlands, is one of the world's largest energy companies. Its U.S. subsidiary is based in Houston. Its shares trade on the New York Stock Exchange under the ticker symbols RDS.A and RDS.B.

Editor's note: This item was modified from its previous version to add a quote from Gov. Tom Corbett.


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