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Williams Considers Selling its Gulf Coast Ethane Cracker Plant

Williams Geismar Olefins facility

Williams Geismar Olefins facility – click for larger version

Williams, because of evil corporate raiders like Keith “Mini-Me” Meister, continues to be in a fight for its very existence (see Corvex Raider Launches Hostile Takeover Attempt of Williams). In an effort to shore up the company–make it stronger AND produce cash that can be used for various purposes–Williams announced in August they are selling their Canadian assets for $1 billion (see Bold Move – Williams Selling Canadian Assets). Yesterday the company announced another potential asset sale–the company’s 88.5% ownership interest in the Geismar, Louisiana olefins petrochemical plant…
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Why Did Shell Choose PA for its Ethane Cracker Plant?

Shell ChemicalsA great article in Investor’s Business Daily explores the link between shale gas and the “explosive expansion” of the U.S. petrochemical industry. Part of the petchem supply chain is finding a cheap source of ethylene, the raw material used in making all sorts of plastics products. Manufacturers get ethylene from ethane cracker plants. The article discusses that link, and the reasons why Shell chose to locate their new multi-billion dollar ethane cracker plant near Pittsburgh. As you can guess, economics play a major role in such a decision. Here are the specific economics that convinced Shell that PA is a good bet…
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RE Burger Smoke Stack Demolished Today, Prep for OH Cracker Plant

RE Burger Plant

RE Burger Plant – click for larger version

The next chapter in the quest to build a $5.7 billion ethane cracker plant complex in Belmont County, OH takes place today. Part of the chosen site for PTT Global Chemical’s cracker plant is the 130-acre site where the R.E. Burger Plant, a coal-fired electric generating plant owned by Ohio utility company FirstEnergy, is located. Today is the day that the plant’s 854-foot concrete smoke stack will get demolished. By the time you read this, it will already be on the ground. Local media is calling the site “historical” and a “landmark.” We’d call it an eyesore. Bring on the cracker! NOTE: We found a dramatic video of the smoke stack and nearby buildings coming down–give it a watch!…
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WV is “Major Winner” from Shell PA Cracker Plant

winnerThe good vibes are still reverberating following Shell’s announcement that they will move forward with building a $3+ billion ethane cracker in Monaca, PA (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). It’s fantastic news for Beaver County, PA, and in fact all of PA. We’ve seen immediate positive effects, particularly in the local real estate market with announcement after announcement of new deals being done. However, the location of the cracker will be near both the borders of Ohio and West Virginia. Former state senator and current West Virginia Public Service Commissioner Brooks McCabe says the PA cracker is as good news for WV as it is for PA. He says WV is “a major winner” with the Shell PA cracker announcement. Here’s why…
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What Happens to Marc./Utica Ethane Until Cracker Plant Launches?

rejected.jpgThe Shell ethane cracker plant “yes” announcement is still, a week later, reverberating across the northeast (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). However, it’s going to be five, loooong years before the plant is actually up and running and processing ethane. So what happens to all of the excess ethane in our region in the meantime? There are some (precious few) pipelines to carry it to markets where it can be cracked, including Canada and the Gulf Coast. Or perhaps pipelined to Philadelphia where it can be loaded on ships and exported to Europe. But those options only handle a relative thimbleful of the ethane we have. Most ethane is blended with methane and sent down the pipeline to be sold as “natural gas”–something called ethane rejection. Separate and sell? Or reject? It all depends on the economics and available markets. Here’s a closer look at what happens to Marcellus/Utica ethane for the next five years, until the Shell cracker goes online…
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Shell’s PA Cracker Plant Will Increase Shale Drilling in Region

Shell ChemicalsThe euphoria over Shell’s announcement last week committing to building a multi-billion dollar ethane cracker plant in Monaca (Beaver County), PA still hasn’t subsided (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). Although the plant won’t be ready for five years–it takes that long to build one–already the plant has been a shot in the arm. As we noted on Friday, commercial real estate is taking off in the region (see Shell Cracker Plant Will Spur Real Estate Deals 150 Miles Away). However, there is another reason the Shell cracker is good for PA and for the shale industry: it will encourage more shale drilling. Currently Marcellus and Utica drillers have very limited options when it comes to selling ethane. Ethane is an NGL (natural gas liquid) that comes out of the borehole along with methane and other hydrocarbons. Some estimates say in the NGL-rich area of southwestern PA and eastern OH, some 20% of what comes out of the ground is ethane–at least for some wells. Right now most drillers have to dispose of that ethane–it’s an expense! When the cracker starts up operations, that ethane can be sold to Shell, helping the balance sheet of drillers. If you can get more money from what you’re getting out of the ground, you’ll do more drilling. Pretty basic common sense. In anticipation, CONSOL Energy already has a contract to sell Shell some of its ethane…
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Shell Cracker Plant Will Spur Real Estate Deals 150 Miles Away

Shell ChemicalsGentlemen, start your engines! Your economic engines, that is. The news earlier this week that Shell has made the commitment to move ahead and build an ethane cracker plant in Monaca, PA has, as we knew it would, set the region buzzing (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go! and Shell PA Cracker Plant Project a Lot Bigger Than First Thought). With the decision now made, those in the real estate community are salivating over how that decision will reverberate throughout the region. There is now an effort underway to lure manufacturers in Texas and along the Gulf Coast area to consider setting up in the western PA (and eastern OH and northern WV) area instead–to take advantage of being that much closer to the biggest market in the country–the East Coast. One real estate pro says commercial real estate for up to 150 miles away is likely to be impacted by the decision to build the cracker plant in Monaca…
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Shell PA Cracker Plant Project a Lot Bigger Than First Thought

Artist's rendering of Shell Monaca Ethane Complex

Artist’s rendering of Shell Monaca Ethane Complex – click for larger version

Yesterday MDN was one of the first to bring you the fantastic news that Shell has decided to move forward with building their multi-billion dollar ethane cracker plant (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). Shell mentioned their positive final investment decision (FID) as part of a larger, wide-ranging announcement on their plans for the next few years and beyond. They were slow off the mark, but Shell finally issued a separate press release about the FID for the Monaca, PA ethane cracker plant complex. As usually happens with a story this big, more details have come out after the initial announcement. For example: Shell’s initial estimate for the cost of the project, more than four years ago, was “$2-$3 billion.” Now? They won’t say. But some news sources are reporting it will be closer to a $6 billion investment. One even goes as high as $11 billion! What Shell *is* saying is that construction on the main part of the facility will begin in 18 months, with production expected to flow beginning “early in the next decade”–which we take to mean sometime around 2020 or 2021. Shell says the project will provide work for 6,000 temporary construction workers while it’s being built, and 600 permanent, full-time employees to operate the facility once it is built. Needless to say, local economic and government leaders in the Pittsburgh region are ecstatic with the news. Here’s more details about the Shell ethane cracker coming to PA, along with select reaction and comments…
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More Progress at Shell’s PA Ethane Cracker Plant Site

Proposed Shell cracker plant site plan

Proposed Shell cracker plant site plan – click for larger version

All signs continue to point to a “go” decision for Shell’s planned ethane cracker plant facility in Monaca (Beaver County), PA. Shell has now spent over half a billion dollars out of a projected $2-$3 billion (25%) on the project already (see Shell has Spent “Half a Billion Dollars” on PA Cracker Already!). Last month a local mall owner said that Shell has leased part of the mall’s parking lot for big bucks (see More Evidence that the Shell Ethane Cracker Plant in PA is a Go). And just last week Shell’s CFO said the PA cracker project is “an excellent project” and they expect to make a decision soon (see Shell Says PA Cracker Decision Coming < 12 Months – Looking Good). We can throw a few more positive signs into the mix. A bridge Shell was building over top a local highway to give trucks easy access to the site is now complete. Shell has committed $69 million to build a new water treatment plant for the local town. And they are now building a new dock facility which, according to Shell, will be “critical” to building the new plant…
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New Tech Converts NatGas into Ethylene, Bypassing Cracker Plants

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Siluria’s Oxidative Coupling of Methane to ethylene (OCM) demo plant in La Porte, Texas

Ethane cracker plants are big deals. We’ve been writing about cracker plants possibly coming to the northeast since 2012, when Shell first floated their idea for a plant and selected a site outside Pittsburgh, in Beaver County, PA (see Shell Announces Location of Ethane Cracker Plant). A cracker plant is a big deal for a couple of reasons. One reason is that building the plant generates thousands of short-term jobs and injects $2-$3 billion (or more!) into the local and regional economy. It’s an economic stimulus the federal government just can’t match–and it doesn’t come from taxpayer’s wallets! In addition, once the plant is built, manufacturing plants begin to locate around it, like mini-satellites. Why? Because an ethane cracker chemically “cracks” ethane turning it into ethylene, the raw material used to make plastics. And plastics are used in just about everything you touch every day. These satellite companies represent thousands of permanent jobs and perhaps an infusion of $15-$20 billion into the regional economy–off the charts! But what if cracker plants were not needed to create ethylene? What if you could bypass cracking ethane and instead go right from natural gas (or methane) to ethylene? That is the premise behind a disruptive new technology from Siluria Technologies. Siluria has operated a pilot plant in Texas for the past year that essentially converts methane into ethylene, without using ethane. Here’s the details…
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More Evidence that the Shell Ethane Cracker Plant in PA is a Go

PREITWe have more evidence that Shell’s Monaca (Beaver County), PA cracker plant is now a go. MDN previously told you that Shell has already spent upward of half a billion dollars out of the projected $2-$3 billion it will take to build the project (see Shell has Spent “Half a Billion Dollars” on PA Cracker Already!). Now comes word from an area mall owner that Shell has purchased more land near the proposed plant and has leased part of the mall’s parking lot “for a significant sum of money”…
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Steady Progress at Belmont County, OH Ethane Cracker Plant Site

OH-WV mapIt was exactly a year ago (last Friday) that PTT Global Chemical announced their intentions to build an ethane cracker plant in Belmont County, OH (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). Since that time a number of positive signs have occurred that indicate this is a real, very serious project. One such sign is that PTT is paying $100 million to have the engineering work done for the plant (see PTT Announces 2 Contractors Working on Belmont Cracker Plant). Another sign is that demolition work at the site has begun (see Ongoing Demolition Work at Future Belmont OH Ethane Cracker Site). The demolition work, as well as the design work, continues. Here’s an update on the latest good signs coming from the proposed Belmont cracker plant…
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Cracker Plant in Scotland “Brought Back to Life” Thx to Marcellus Ethane

ineosThe Swiss-based company INEOS is a young but rapidly growing chemical company with roughly $40 billion in sales per year. INEOS’ competitors would be companies like BASF, Bayer and Dow Chemical. One of the projects owned by INEOS is an ethane cracker/chemical plant complex in Grangemouth, Scotland. It is Scotland’s biggest manufacturing complex hosting Europe’s biggest ethane storage tank–able to store up to 33,000 tonnes of liquid natural gas. INEOS announced yesterday that the second manufacturing unit at the Grangemouth plant has been “brought back to life” some eight years after being mothballed. The reason? To begin processing Marcellus shale ethane that will be shipped to it later this year from the Marcus Hook refinery near Philadelphia…
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Shell Leases 76,000 Sq Ft Office Space Near Cracker Plant Site

We believe there’s little doubt remaining that Shell will commit to building a $3 billion ethane cracker plant in Monaca (Beaver County), PA. The evidence continues to mount. Shell is spending big bucks on a variety of activities related the project, as we’ve previously indicated (see Shell Begins Hiring for Monaca, PA Ethane Cracker Plant). The latest evidence comes from the Pittsburgh Business Times who has an inside source telling them that Shell has cut a deal with Michael Baker International to lease a 76,000-square-foot building with a 400-car parking lot sitting on 100 acres near the proposed cracker site in Beaver County…
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Shell Begins Hiring for Monaca, PA Ethane Cracker Plant

Yesterday a sharp MDN reader called our attention to a job posting on LinkedIn. The posting, by Shell, seeks a “Technical Service Team Lead Polyethylene (Pittsburgh, PA).” When you read the job listing (below) it clearly states it the job is for their Monaca, PA ethane cracker plant complex. Now this is a single job posting–so far–although it’s for a very important position. Still, our point is this: You don’t spend millions building a new bridge over a highway as a new entrance to a piece of property (see Shell Begins Building Bridge to PA Cracker Plant Site), you don’t spend $80 million to clean up that site (see Shell Paying $80M to Clean Up PA Site for Ethane Cracker Plant), you don’t spend $69 million to move a water intake site and build a new water treatment site for the local town because the current water intake is on the site where you want to build (see Shell Paying $69M to Move Water Plant for Cracker Project), you don’t spend money to lease land to build two ethane pipelines to that site (see Exclusive: Shell Leasing Land for 2 Pipelines to PA Cracker Plant), and you don’t begin hiring people to work on/at the plant–unless you’re serious about building it…
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Exclusive: Shell Leasing Land for 2 Pipelines to PA Cracker Plant

exclusiveMDN received an exclusive tip from a trusted source (who is also an MDN subscriber) yesterday about the Shell ethane cracker plant in Monaca (Beaver County), PA. Our source, who lives in Beaver County, told us he was approached by a Shell landman about signing a pipeline right-of-way through his property to build a pipeline to the plant. We have an account of our source’s conversation with the landman, and some key information the landman let slip about Shell’s plans for two such pipelines…
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