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New Shell Pennsylvania Petrochemicals Complex takes advantage of shale revolution

15 June 2018

In November 2017, Shell Chemicals officially started construction on its $6 billion ethane cracker plant in Potter Township, Pennsylvania, a project that will take several years to complete. Shell made it official in June last year when it announced a final investment decision on the plant. Since then, crews have been working around the clock to prepare the site for main construction.

Artist’s impression of the Shell Potter Township plant
Artist’s impression of the Shell Potter Township plant

These crackers—where ethane from shale gas is ‘cracked’ to form ethylene - are transforming the US petrochemicals industry. Research company IHS estimates that the country’s ethylene capacity will expand by a massive 38% in the next few years, with new plants planned in Texas and Louisiana, as well as western Pennsylvania.

Traditionally, most plants made ethylene out of crude oil. But in the US, the chemical industry’s use of cheap ethane-rich natural gas from shale formations as a raw material has climbed from 50% to 80% in recent years, according to IHS.

The research company estimates that the US chemical industry will make $129 billion in new investments nationwide as a direct result of shale gas—adding more than 50,000 permanent jobs to a workforce of around 800,000.

This article, by Hazardex editor Alan Franck, looks at the scale of Shell’s project in Pennsylvania, and some of the likely consequences of the shale revolution on the petrochemicals sector.


That site preparation at Potter Township in Beaver County was a significant undertaking by Shell, which moved 5.5 million cubic metres of earth to transform the site, which previously held a zinc smelter.

In addition, more than 4,200 steel pilings were installed for foundations across the property, while new bridges and rail lines were installed and state Route 18 was relocated in front of the plant.

Now that the site is fully prepped for construction, the actual plant is ready to be built.

The construction will include the building of four large processing units that include one ethane cracker and three polyethylene units. The ethane cracker will be the most significant part of the plant with more than 200 major components and 95 miles of pipe.

In addition, the company will build a 250-megawatt natural gas-fired power plant, which will produce electricity and steam to run the cracker plant. About one-third of the electricity produced at the site will help supply the local electrical grid.

Finally, Shell will construct a 275-metre-long cooling tower, a co-generation tower, rail and truck loading facilities, a new water-treatment plant, an office building and a laboratory.

The facility is expected to use shale gas from the Marcellus and Utica basins to produce 1.6 million metric tons of polyethylene per year. That polyethylene will be used to make a wide array of products from food packaging to furniture to sports equipment, according to Shell.

At its peak, the project will require 6,000 construction workers, while 600 permanent jobs will be created when the plant becomes operational early next decade.

Potter Township is about 50 kilometres north-west of Pittsburgh. As a result of its close proximity to a reliable source of natural gas, Shell says the plant and its customers will benefit from shorter and more dependable supply chains, compared to traditional sources of supply from the Gulf Coast. The location is also ideal because more than 70% of North American polyethylene customers are within a 1,100-kilometre radius of Pittsburgh.

The largest part of the facility will be the ethane cracker, comprising seven tail gas and natural gas fired ethane cracking furnaces featuring a rating of 60 million metric British thermal units (MmBtu) per hour of heat input each.

The plant is situated at the heart of the Marcellus Shale
The plant is situated at the heart of the Marcellus Shale

Its furnaces are to be equipped with low NOx burners and will be controlled via selective catalytic reduction (SCR).

One 1.5 million tonnes per year ethylene manufacturing line and two gas phase polyethylene manufacturing lines with an output capacity of 550,000t per year will also be part of the facility. In addition, one 500,000t per year slurry technology polyethylene manufacturing line will be installed.

The site will also feature four diesel-fired emergency generator engines and three diesel-fired fire pumps.

The petrochemical complex will feature facilities to facilitate the handling of polyethylene pellet blending, handling, storage and load-out processes.

These facilities include one recovery oil storage tank, one spent caustic storage tank, two equalisation wastewater storage tanks, and one light gasoline storage tank.

Two hexane storage tanks and two pyrolysis fuel oil storage tanks will also be built, along with a variety of miscellaneous storage tanks.

Shell has also announced significant investment in environmental monitoring and control systems. It has signed an agreement with the Clean Air Council and the Environmental Integrity Project whose terms include the installation and operation of a fence-line monitoring program to ensure that any gases or contaminants remain at acceptable levels.

The company will also increase the frequency of monitoring the plant’s flares and ensure it meets or exceeds the requirements of the Clean Air Act by removing 98% of pollutants.

Joe Minnitte, a spokesman for Shell Chemicals, said the fence-line monitoring is in addition to other air pollution monitoring the company planned internally for the cracker plant.

“Fence-line monitoring is used at other (Shell) facilities but was not included in our permit due to the comprehensive internal monitoring Shell incorporated in the design,” Minnitte said. “In addition to the fence-line monitoring, Shell will have several hundred in situ gas and flame monitors along with a leak detection program monitoring over 70,000-plus components throughout the facility. This effort will utilize a combination of internal and external resources.”

The Potter Township plant will be at the centre of the Falcon Ethane Pipeline System, a 156 km pipeline network connecting three major ethane source points in Pennsylvania and Ohio. Shell Pipeline Company LP will build, own and operate the Falcon System.

Final right-of-way purchase efforts have been completed, permits have been submitted to state and federal agencies, and mainline construction is scheduled for 2019.

The mostly 12-inch pipeline will secure ethane supply, building new and reliable infrastructure while keeping safety as the top priority, Shell says. The project will bring new jobs to the area, with up to 1,000 workers at peak of construction.

Other than Shell, Thailand-based PTT Global Chemical is also considering building an ethane cracker plant in the area, according to local sources, on the site of a now-demolished coal-fired power plant along the Ohio River in Belmont County, Ohio.

Plant facilities
Plant facilities

According to Construction Dive, these plants are big moneymakers. During a results forecast in late 2017, Royal Dutch Shell said it expected the fully operational Potter Township plant to help add $3.5 billion to $4 billion of earnings each year to the company's chemical division.

And according to National Public Radio, Pennsylvania gave Shell a 25-year, $1.65 billion tax credit to build its plant in the state. Officials agreed to a 15-year tax amnesty and will give Shell a $2.10 tax credit for every gallon of ethane it purchases from state natural gas drillers.

PTT was also offered sweeteners. Back in 2015, the company said JobsOhio, the private economic development arm in the state, offered it an aggressive incentive package if it would build its cracker plant there, according to Columbus Business First. PTT said the proposal included tax credits for job creation, workforce training and infrastructure improvement grants, and local tax credits.

Because of the low cost of US ethane, the cost advantage of plastic made in the United States is significant, compared with Europe or Asia.

Other chemical makers that depend on natural gas—such as fertiliser producers—are also building new plants. In the next five years, the industry expects to build or retrofit about a dozen plants.

An industry-funded study from research company IHS estimates that the US chemical industry will make $129 billion in new investments nationwide as a direct result of shale gas—adding more than 50,000 permanent jobs to a workforce of around 800,000.

One of the conclusions of the International Energy Agency’s (IEA) latest five-year forecast, published in March 2018, is that the rise in the use of ethane and other shale-derived feedstocks will affect traditional refineries.

World oil demand is expected to rise by 6.9 million barrels per day (bpd) by 2023, with a quarter of this growth coming from demand for petrochemical feedstocks ethane and naphtha. “Global economic growth is lifting more people into the middle class in developing countries and higher incomes mean sharply rising demand for consumer goods and services,” the IEA said.

“A large group of chemicals derived from oil and natural gas are crucial to the manufacture of many products that satisfy this rising demand,” it added.

Naphtha is made by oil refineries processing crude, but other petrochemical feedstocks - ethane or liquefied petroleum gas (LPG) - are processed outside traditional oil refineries.

“Ethane, liquefied petroleum gases and naphtha, pose a bigger threat to the refiners’ market share than electric vehicles and gas-powered transportation combined,” the IEA said, estimating refiners would see just 4.8 million bpd of the demand growth to 2023, missing out on 30% of it.

The boom in US shale gas has dramatically expanded the availability of ethane, and a string of new projects are underway to process it. In total, the world is expected to add 1.4 million bpd in new petrochemical-producing steam crackers to 2023, the IEA said.

Demand for ethane will expand at the fastest pace in the next five years, rising by 885,000 bpd, followed by naphtha with growth of 495,000 bpd and LPG with growth of 40,000 bpd, it forecast.

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