Shell finally announced the location of its highly anticipated cracker plant in the Appalachian region. Shell was courted by Ohio, Pennsylvania, and West Virginia, but eventually decided on locating the plant in Monaca, Pennsylvania. All three states were lobbying for the location of the multi-billion dollar facility because it will be the first plant of its kinds built in the area in decades and will likely support thousands of jobs during construction. The complex will include an ethane cracker and potentially polyethylene and mono-ethylene glycol units. All the aforementioned products are used in manufacturing.
The plant is also important for northeast mineral owners who want to make sure they continue to receive the best prices possible for the natural gas liquids (NGLs) produced from the Marcellus & Utica Shales. NGLs are more closely tied to oil prices than natural gas prices. With gas prices below $2.30 in early 2012, operators are looking to maximize the value of produced liquids (NGLS & oil). Local demand will only help. Prices for NGLs should remain linked to oil as long as there is significant demand in the region and producers have viable transportation options (pipelines).
“We are very pleased to have signed this site option agreement,” Dan Carlson, GM, New Business Development, Shell Chemicals. “This is an important step for the project, and we look forward to working with the communities in Pennsylvania, and gas producers across Appalachia, as we continue our efforts to develop a petrochemical complex.”