Shell Plans $4 Billion Ethane Cracker Plant in PA To Benefit Northeast Ohio

The recent announcements that Royal Dutch Shell is planning a $4 billion ethane cracker in western Pennsylvania and PTTGC America is considering a location for a similar facility in southern Ohio each provide positive economic opportunities for not only their local communities but Ohio and our region as well.

Shell is planning to build in an ethane cracker, the first major U.S. project of its type to be built outside of the Gulf Coast region in 20 years, in Beaver County, PA. Construction is anticipated to begin within 18 months and take several years to complete. When finished it will employ 600 people. The facility will produce polyethylene that is used by manufacturers in plastic products.

The term “ethane cracker” comes from the process of turning ethane into ethylene. Ethane, a natural gas liquid found in certain natural gas deposits including the Marcellus and Utica Shales, has to be heated to very high temperatures to “crack” or break apart ethane’s molecules to create ethylene. Once made into ethylene it is typically further transformed into different types of polyethylene pellets that are shipped to manufacturers.

Although the facility is in Pennsylvania, its location along the Ohio River will have an economic impact for Ohio as well. It will provide easier access to polyethylene for Ohio manufacturing companies utilizing the product, minimizing their costs and reducing start-to-finish product production time. The same benefits apply for new companies looking to build manufacturing facilities for similar reasons.

Currently, Northeast Ohio is home to a thriving cluster of more than 370 food processing and manufacturing establishments; is the second largest supplier of automotive components; has more than 400 companies dedicated to the polymer and materials industry; and the biomedical/medical device industry is rapidly growing. Each industry potentially will benefit from the new ethane cracker and the polyethylene that can be utilized in their products.

Along with the Shell project, PTTGC America, Thailand’s largest and Asia’s leading integrated petrochemical and refining company, is considering development of an ethane cracker in Mead Township along the Ohio River in Belmont County.

The company conducted a $10 million pre-engineering feasibility study that showed positive results and recently announced a $100 million investment to determine a cost estimate for the full project. They are currently developing detailed front-end engineering designs and working closely with the Ohio Governor’s Office, JobsOhio and the Ohio EPA. A final investment decision is anticipated in late 2016 or early 2017. If the project moves forward it will take approximately four years to build the cracker.

Interest in the proposed site is because of its location on the Marcellus and Utica shale region and its access to major highway, rail, pipeline and port infrastructure that would increase efficiency while reducing the environmental and financial costs of transportation. If built the facility would create hundreds of full-time jobs, thousands of construction jobs and multibillion dollars in investments.