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Shell Decision on Cracker Plant Expected to Pay Huge Dividends for PA

The decision by Shell Oil Co. to build an ethylene processing plant outside Pittsburgh is being seen as a major victory for the entire southwestern PA region by labor and business alike. It is expected to provide a huge economic boost in jobs and spending among supply chain businesses and construction companies.

A host of public officials, from the Governor to the state’s Congressional delegation and DCED, had worked with Shell to urge the company to come to western Pennsylvania. The plant, which is slated to be built near Monaca, Beaver County, would convert Marcellus Shale wet gas into shorter chain hydrocarbons such as ethylene and propylene to make other products like plastics.

Shell said it had signed an agreement with Horsehead Corp. to purchase the zinc smelter’s 300-acre property along the Ohio River in Potter Township near Monaca, 28 miles from Pittsburgh, for a petrochemical complex that will include a cracker and polyethylene and monoethylene units.

It will take at least two years until environmental permits are approved and construction of the cracker can begin, and another four years to build the $3 billion plus facility. Shell predicted building the plant and related projects would mean as many as 10,000 construction jobs. The plant is expected to employ several hundred people in specialized and technical jobs and to generate as much as $16 billion in private investment.

Ohio and West Virginia also had made pitches to attract the “cracker” plant, and both expect some positive economic impacts because of the Beaver County location.

Shell had already invested considerably in the Marcellus Shale play, having spent almost $5 billion in 2010 for drilling rights on 650,000 acres.

AFL/CIO officials have told ERG that the announcement could be the “most positive news for the union families of southwestern Pennsylvania in decades.”