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Shell Signs Third Purchase Extension for PA Cracker Site

Shell Chemical LP has signed an amended purchase agreement that extends the period of time it has to buy a 300-acre site in Western Pennsylvania, which it continues to evaluate for a long-awaited ethane cracker that would convert ethane from the Marcellus Shale into ethylene.

Horsehead Holding Corp. owns a zinc smelting plant on the property near Monaca, PA, in Beaver County’s Potter Township that is slated for closure. Horsehead announced the renewed agreement on Thursday, which also provides for the start of demolition activities at Shell's expense sometime in the first quarter of 2014.

A Shell spokeswoman said the company had extended its option on the property and added that work will soon begin to prepare portions of the site for possible construction. But Shell continues to maintain that it is only continuing its evaluation process and no final decision has yet been made on the cracker plant.

Speculation has continued to mount about Shell's plans for the Western Pennsylvania facility ever since the Royal Dutch Shell plc subsidiary signed a purchase option for the site in March 2012 (see Shale Daily, March 16, 2012).

Progress at the site has been slow to materialize. Last June, Shell asked for and received a six-month extension to purchase the site from Horsehead for the second time and Thursday's announcement adds to that tally (see Shale Daily, July 2; Dec. 28, 2012).

The extensions, along with Shell's confirmation that it has been in negotiations with several landowners along an industrial corridor along State Route 18 (see Shale Daily, Nov. 22), have kept hopes alive that the company will move forward with its plans for the cracker. Financial analysts, though, have said in the past that it is unlikely Shell will build the plant anytime before 2015 (see Shale Daily, June 25).

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