A subsidiary of Royal Dutch Shell plc has been given another six months to decide whether to purchase property in western Pennsylvania for a proposed "world scale" ethane cracker in the heart of the Marcellus Shale.

Shell Chemical LP signed an option to purchase a 300-acre site near Monaca from zinc producer Horsehead Holding Corp. in March, presumably for a major petrochemical complex that would include a cracker (see Shale Daily, March 16). The original terms called for the deal to be concluded by the end of 2012.

"As Shell continues to consider the possibility of building the proposed petrochemical facility in western Pennsylvania, we can confirm the announcement by Horsehead that there is a six month extension on Shell's option to purchase the site owned by Horsehead in Beaver County," Shell spokeswoman Kayla Macke told NGI's Shale Daily on Thursday.

"We are still in the assessment phase of the project to determine the site's suitability. Among the many factors we continue to assess are the ethane feedstock supply, engineering and design work, customer support confirmation for our products, permit approvals, and confirmation that the project is economically robust and competitive."

Last June another Shell official conceded that the company was weighing the economic feasibility of a cracker -- possibly capable of processing 60,000-80,000 b/d of ethane -- at the Monaca site (see Shale Daily, June 12).

Shell has offered to pay localities millions for lost tax revenue to help make up for the site's potential designation as a Keystone Opportunity Expansion Zone (see Shale Daily, Oct. 3). If approved, Shell would be eligible for 22 years of tax exceptions and abatements.

The company has offered Beaver County officials a proposal to pay localities 110% of the annual property tax revenue currently being paid by Horsehead, but negotiations were said to be continuing. Shell's offer could amount to an annual payment of about $6.82 million over 22 years.