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Shell makes step with Pennsylvania Petrochemical Complex project

Shell confirms Monaca Ethane Cracker on projects list

After reassessing its projects list in regards of its investment capabilities, the super major Royal Dutch Shell (Shell) is confirming its Pennsylvania Petrochemical Complex project and the related Monaca Ethane Cracker to stay in its projects list.

Instead, Shel is reconsidering the envisaged gas to liquid (GTL) project on Gulf Coast.

This decision is following all the preparatory work engaged by Shell regarding the site location of the project in Pennsylvania and to secure the necessary quantity of ethane to be used as feedstock for the petrochemical complex.

In March 2012, Shell and Horsehead Corp. (Horsehead) had signed a land option to convert the existing Potter 300 acre zinc smelter into an ethane cracker and petrochemical complex.

Shell_Pennsylvania_Appalachia_Ethane_Cracker_MapSince then this land option has been extended already twice to allow Shell to complete site environmental assessment and project feasibility study.

In parallel Shell closed deal for the ethane supply with Consol Energy Inc. (Consol), Noble Energy Inc. (Noble), Seneca Resources Corp., (Seneca), and Hilcopr Energy Co. (Hilcorp).

Some other ethane supply agreements should follow since Shell is planning to feed its Appalachia ethane cracker  50% with contracted supply and 50% with its own shale gas production from its won acreage in the Marcellus basin.

In acquiring Pennsylvania East Resources, Shell inherited of 900,000 acre of shale gas field across the Tioga County, Lawrence County and Butler County.

Not only these Marcellus Basin acreages hold high quality shale gas, but also untapped tight gas and condensate.

These condensate represent valuable feedstock for a petrochemical complex.

In this context, the quality and quantity of this Appalachia Basin wet gas motivated Shell to build a petrochemical complex in Pennsylvenia to monetize it locally instead of exporting the ethane through expensive pipelines to the Gulf Coast where all companies are expanding ethane cracker production.

This strategic choice was also well sponsored by a $1.65 billion tax break billed by Pennsylvania Governor in order to maximize Shell local added value for this $3 billion worth of capital expenditure.

Shell ethane cracker to feed three polyethylene units

Downstream the ethane cracker, Shell was originally planning to produce:

The 4 billion (US) project is a 50-50 joint venture between Shell Petrochemicals Company Limited (CSPC) and China National Offshore Oil Co. (CNOOC). The BSF (Bechtel, SEI-Sinopec Engineering Institute, Foster Wheeler) consortium is responsible for managin – Polyethylene (PE)

 – Monoethylene Glycol (MEG)

 – Polyolefins

Since Shell selected Linde license for the ethylene production, the front end engineering and design (FEEDcontract is announced to be awarded to LindeBechtel tandem.

In the meantime, the scope of work for the Pennsylvania Petrochemical Complex has changed slightly in concentrating production on three units of polyethylene with a process offering a wide range of PE grades.

As a result, Shell ethane cracker should feed the Pennsylvania Petrochemical Complex to produce:

Shell_Pennsylvania_Ethane_Cracker_and_Petrochemical_Complex – 1.5 million tonnes per year (t/y) ethylene

– 500,000 t/y of gas-phased high density polyethylene (HDPE)

 – 500,000 t/y of slurry HDPE

 – 500,000 t/y of linear low density polyethylene (LLDPE)

Since its joint venture with China National Offshore Oil Corporation (CNOOC) in the China Nanhai Petrochemical Complex, already executed by Bechtel in the years 2000s, Shell is planning to comeback by 2018 on the polyethylene market with this world-scale Pennsylvania ethane cracker and petrochemical complex.

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