Nov 7, 2014 3 min read

Shell Chemical LP exercised its option to buy a former zinc plant in Beaver County, which it hopes to convert to a petrochemical plant.

Horsehead Holding Corp., which owns the plant in Potter Township, Beaver County, announced the deal Friday. The company hopes Shell will close on the sale next year.

Shell hasn’t formally committed to building the plant, which would convert ethane from Marcellus Shale natural gas liquids into chemicals used to make plastics, tires and even antifreeze.

The company said it may take years to decide whether to build the plant about 25 miles northwest of Pittsburgh.

Despite the lack of a final decision, regional and state leaders said Friday they were encouraged by the news.

“Today’s announcement is another positive indication for Shell’s proposed petrochemical facility in Beaver County,” said Gov. Tom Corbett in a statement. Corbett, who lost in Tuesday’s Pennsylvania gubernatorial election, said he would “continue to lead Pennsylvania’s bipartisan effort to ensure this multibillion dollar project continues to move forward. If built, this project would be the single largest industral investment in Southwest Pennsylvania in a generation,” he said.

The potential complex would include an ethane cracker which would process ethane from Marcellus and Utica Shale gas to produce ethylene, a primary building block for petrochemicals. Ethylene is then used for a number of chemical derivatives used in the production of various products, including food packaging, bottles, house siding, pipes, carpets, tires, footwear, detergent and adhesives.

Pittsburgh Regional Alliance President Dewitt Peart said in a statement the purchase announcement “reaffirms Shell Chemical’s interest in building a petrochemical facility in Beaver County and is an important step forward in making the proposed facility a reality.”

PRA noted in a news release an economic impact analysis on the proposed facility, conducted by the Pennsylvania Economy League of Greater Pittsburgh in 2012 found during the peak construction phase there are likely to be 10,000 direct and 18,000 total jobs created across the 10-county Pittsburgh region. The economic output during peak construction is projected to be $2.8 billion.

Once the facility is in operation, the analysis predicts 400 direct jobs with 2,000 to 8,000 jobs total and an annual economic output from operations at $4.8 billion.

Shell’s proposal in 2012 for an ethane cracker in the region was joined later by a second one by Brazilian energy company Odebrecht Group, which is currently performing its due diligence for an ethane cracker near Parkersburg, W.Va.

David Peebles, vice president for Odebrecht’s Appalachian Shale Cracker Enterprise LLC, told the Observer-Reporter’s Energy Report in October the two projects are not in competition with each other, adding there could be room for additional crackers in the region, given the growing output of ethane from the natural gas liquids being produced in the Marcellus and Utica shales.