Shell Chemical has exercised its option to buy a former zinc plant in Monaca, which it may convert to a petrochemical plant.
Horsehead Holding Corp., which owns the former plant in Potter Township, Beaver County, announced the deal Friday. The company said it hopes Shell will close on the sale next year.
No price for the property was revealed.
Shell hasn’t formally committed to building the plant, which would convert ethane from Marcellus Shale natural gas liquids into chemicals used to make plastics, tires and even antifreeze.
Shell Chemical vice president Ate Visser told the Pittsburgh Post-Gazette exercising the option “is a good decision” but doesn’t mean Shell has made a final decision to build the plant. Analysts have noted a corporation such as Shell may expend considerable resources on a project, then decide not to pursue it.
Shell has said it may take years to decide whether to build the plant. Horsehead has ceased its operations at the site, while the state has offered Shell substantial tax breaks if it locates the plant there.
The Pittsburgh Regional Alliance released a statement saying it recognizes land acquisition as “yet another significant step in the progress of the project but it doesn’t signal a final investment decision at this time. However, for those of us who drive by the site on a regular basis, it’s clear that the landscape is changing and substantial demolition is occurring.”
Shell’s multi-year evaluation of the site will include environmental analysis, engineering design studies, assessment of ethane supply and economic viability. The company has said it will continue with community meetings regarding its intentions.
An economic impact analysis on the proposed facility carried out by the Pennsylvania Economy League of Greater Pittsburgh in 2012 found that during the peak construction phase there are likely to be 10,000 direct and 18,000 total jobs generated across the 10-county Pittsburgh region.
The economic output during peak construction is projected to be $2.8 billion. Once the facility is in operation, the analysis predicts 400 direct jobs with 2,000 to 8,000 jobs total and an annual economic output from operations at $4.8 billion.
More information about Shell Chemical’s multi-year evaluation process is available at www.shell.us/aboutshell/projects-locations/appalachia.html.