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Shell Exec Shares Inside Story of Why They Chose PA for Cracker
June 29, 2016June 29, 2016

Ate Visser – Shell Chemical

Yesterday was the second and final day of the Northeast U.S. & Canada Petrochemical Construction Conference being held in Pittsburgh. And boy oh boy what a day it was! Ate Visser, vice president of Appalachia petrochemicals at Shell Chemical took to the stage and shared with attendees the behind-the-scenes reasons for why Shell elected to build a cracker plant in Pennsylvania. There were three reasons: (1) cheap ethane from the Marcellus/Utica; (2) close to major northeastern markets; (3) tax breaks offered by PA. Here’s comments made by Visser, as reported from several journalists in the audience…
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Braskem | Economic Impact | Energy Companies | Energy Services | Ethane | Industrywide Issues | Jobs | Ohio | Pennsylvania | Processing Plants | PTT Global | Shell | Statewide OH | Statewide PA | Statewide WV | West Virginia

Event Speakers Say More Crackers on the Way in the Northeast
June 28, 2016June 28, 2016

There was lots of cracker talk at the first Northeast U.S. & Canada Petrochemical Construction Conference & Exhibition in Pittsburgh yesterday. According to NGI’s ace reporter for Shale Daily, Jamison Cocklin, excitement over the Shell cracker announcement from a few weeks ago was “palpable” at yesterday’s event. There was plenty of talk about the Shell cracker–but the talk coming from the event that interests MDN is talk about both the PTT Global Chemical cracker planned for Ohio, AND the Braskem cracker planned for West Virginia. These other two world class cracker plants (similar in size and scope to Shell’s project) “remain on track.” Now that is news!…
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Allegheny County | Beaver County | Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Shell

Prepping a Work Force to Build & Operate the Shell Cracker
June 23, 2016June 22, 2016

The coming Shell ethane cracker plant complex in Monaca (Beaver County), PA, will create a lot of jobs–some in the near-term, but many in the medium-to-longer term. The plant won’t be complete for another five years. Between now and then it will take 6,000 temporary workers to build it. Once built, the plant will take 600 permanent employees to run it. Is Beaver County and the greater Pittsburgh region ready for that kind of jobs challenge? As of today, the answer would be “no.” But leaders in the area are working on it…
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Energy Companies | Shell

Flaky Shell in Love with Shale Again – “Heart of Growth Plans”
June 22, 2016June 21, 2016

Shell has long mystified us when it comes to shale. Shell has been involved in the Marcellus Shale for years with its SWEPI (Shell Western E&P) division–at one time with 900,000 acres under lease. But in 2014 Shell took an ax to its Marcellus drilling program (see Cuts Coming to Shell’s Marcellus Shale Operations). Then our heads started to spin. Shell sold 208,000 Marcellus acres to Rex Energy (see Rex Energy Takes Shell to the Cleaners – Picks up 208K Acres), and then they turned around and bought another 155,000 acres from Ultra Petroleum (see After Selling 208K Marcellus Acres, Shell “Buys” 155K More Acres!). In January of this year, Shell said they were exiting shale drilling following the merger with BG (see Shell to Cut 10,000 Jobs After Buying BG; Exiting Shale Drilling). In March, the company announced it was merger the conventional and unconventional (shale) divisions into a single division (see Shell Giving Up on Shale? Merges Unconventional with Conventional). Which brings us to a Reuters story from yesterday. Shell now says they are putting unconventional (i.e. shale) “at the heart of its growth plans.” Can anyone say “flaky”?…
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Economic Impact | Energy Companies | Ethane | Industrywide Issues | Jobs | Processing Plants | Shell | Statewide WV | West Virginia

WV is “Major Winner” from Shell PA Cracker Plant
June 20, 2016June 20, 2016

The 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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Energy Companies | Ethane | Industrywide Issues | Processing Plants | Shell

Shell’s PA Cracker Plant Will Increase Shale Drilling in Region
June 13, 2016June 13, 2016

The 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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Beaver County | Economic Impact | Energy Companies | Ethane | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell

How Republican Tom Corbett Convinced Shell to Locate Cracker in PA
June 13, 2016June 13, 2016

Former Gov. Tom Corbett

There’s no question that Tom Corbett was ten times the governor that Tom Wolf is now. Wolf is an undisputed disaster. Good thing Corbett is the one who brokered the deal to get Shell to select Pennsylvania as the location for its multi-billion dollar ethane cracker plant. A big tax incentive helped lure Shell to the Keystone State, no question about it. But that’s not the only reason the company decided on PA. When it comes to business and sales, there are a couple of tried-and-true axioms. One of those axioms is that people do business with people–not companies. Another is this: people buy from people they know, like and trust. Take any one of those elements away, and you don’t make a sale. So how did Tom Corbett “sell” Shell on PA as the location? There were a number of factors, but one way that stands out as a shining example: Corbett treated the Shell execs to a Pittsburgh Steelers game…
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Economic Impact | Energy Companies | Ethane | Industrywide Issues | Ohio | Pennsylvania | Processing Plants | Shell | Statewide OH | Statewide PA | Statewide WV | West Virginia

Shell Cracker Plant Will Spur Real Estate Deals 150 Miles Away
June 10, 2016June 10, 2016

Gentlemen, 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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Beaver County | Economic Impact | Energy Companies | Ethane | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell | Statewide PA

Shell PA Cracker Plant Project a Lot Bigger Than First Thought
June 8, 2016June 8, 2016

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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Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell | Statewide PA

PA Gov Wolf Attempts to Take Credit for Shell Cracker Decision
June 8, 2016June 8, 2016

Former PA Gov. Tom Corbett – the reason Shell decided to build a cracker

You know what’s really sleazy about politicians? When they take credit for something they had NOTHING to do with. Like Pennsylvania Gov. Wolf is doing with the fantastic news that Shell will build an ethane cracker plant in the state (see yesterday and today’s stories). The reason Shell even considered PA in the first place is because of Wolf’s far more able and talented predecessor, Gov. Tom Corbett. Corbett fought tooth and nail to get Shell to locate the cracker in the Keystone state. Part of Corbett’s fight included getting $1.7 billion in tax breaks approved, to lure the plant to PA (see Gov. Corbett’s PR Campaign for $1.7B Cracker Plant Tax Break). The cracker decision kept getting delayed during Corbett’s tenure, something he took a lot of heat over. If Shell had committed sooner, PA may have had a different election result (re-electing Corbett instead of the disastrous Wolf). Anywho, that was yesteryear, and today, Tom Wolf is taking credit for something Tom Corbett did. Typical…
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Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell

Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!
June 7, 2016June 7, 2016

This is the biggest of big news. We’ve been waiting for this day a LONG time. Earlier today Shell held a “Capital Markets Day” (in the Netherlands) and provided an extensive update on “reshaping” the company–for 2020 and beyond. As part of the update, hidden part of the way through their press release, we get this statement from Shell: “In Chemicals, the company already has brownfield growth projects underway on the US Gulf Coast and in China. Today we are announcing the final investment decision on a new, 1.5 million tonnes per annum (mtpa) cracker and polyethylene plant in Pennsylvania, USA, which will use natural gas from shales production as its feedstock. Once these projects are on stream, early in the next decade, Shell’s ethylene capacity should reach around 8 mtpa, compared with 6.2 mtpa today.” The implication is that the FID (final investment decision) is “yes, we’re building it” as evidenced by the phrase “once these projects are on stream…” MDN predicted it (see More Evidence that the Shell Ethane Cracker Plant in PA is a Go). You don’t spend half a billion (out of $2-$3 billion) and not move forward. Still, it’s fantastic to have Shell finally, after five years, say “Yes, we’re building it.” Another fascinating bit of news from today: Shell says shale will be very important to the future of the company, after 2020…
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Energy Companies | Industrywide Issues | Jobs | Shell

Shell Cutting Another 2,200 Jobs Post-BG Merger, 12,500 Total
May 26, 2016May 26, 2016

In February Shell completed the merger with/purchase of BG Group–the largest such megamerger since Exxon bought Mobil in the 1990s (see Shell & BG One Company After Today, Shell Ponies Up $14.4B Cash). Shell’s purchase of BG was all about LNG–liquefied natural gas (see LNG Love Story: Shell Makes Play to Buy BG in $69.7B Megamerger). As part of the purchase, Shell was up front about the fact that they would lay off some 10,000 people in the combined company (see Shell to Cut 10,000 Jobs After Buying BG; Exiting Shale Drilling). That process has already begun. And unfortunately, Shell announced yesterday they will cut an extra 2,200 jobs, taking the grand total to nearly 12,500 job cuts from 2015 through the end of 2016…
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Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell

More Progress at Shell’s PA Ethane Cracker Plant Site
May 12, 2016May 12, 2016

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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Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell

Shell Says PA Cracker Decision Coming < 12 Months - Looking Good
May 5, 2016May 5, 2016

The muckety-mucks from Shell held their quarterly earnings phone call with analysts yesterday–and there is what we consider big news to report coming from that call. In response to a question from an analyst, Shell’s Chief Financial Officer, Simon Henry, commented there are four major “chemicals” projects currently under consideration by Shell. He also said a decision on the PA cracker plant project planned in Beaver County will likely be the first decision to be made because of “the timing of certain commitments that are already in place.” He added these glowing words about the PA cracker: “It’s an excellent project…[that] provides quite some portfolio resilience relative to the rest of the opportunities.” He later said “It’s a very strong and robust project.” If the price of oil were higher than the current $40, pulling the trigger on the PA cracker would be “a very easy decision.” When you read his comments, it’s hard to miss the enthusiasm at the highest echelons inside Shell…
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Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell

More Evidence that the Shell Ethane Cracker Plant in PA is a Go
April 28, 2016April 28, 2016

We 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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CONSOL Energy | Energy Companies | Energy Services | Ethane | Industrywide Issues | Processing Plants | PTT Global | Shell

CONSOL Energy CEO Predicts 2 Ethane Crackers Coming
April 18, 2016April 18, 2016

Nick DeIuliis – CEO CONSOL Energy

Looks like MDN is not the only source that believes both the Shell and PTT Global ethane crackers will (eventually) get built. After all, Shell has spent half a billion (out of $2-$3 billion) on their PA-based project already (see Shell has Spent “Half a Billion Dollars” on PA Cracker Already!). They’re 20-25% of the way there! Doesn’t take a genius to connect the dots with that project. PTT Global has purchased land, is leveling the site and paid for design work on their OH-based site, spending upward of $200 million (see our PTT stories here). Now, none other than Nick DeIuliis, CEO of CONSOL Energy, is predicting both the Shell and PTT Global ethane crackers will get built…
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