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.