After officials at Royal Dutch Shell announced plans in March to pull back on infrastructure projects in North America, there were some questions over what this meant for the company’s proposed world-scale ethane cracker that would be built outside of Pittsburgh, Pa. The answer appears to be that the project is still moving forward.
Sources have informed Midstream Business that Shell will be moving ahead with the project and is expected to submit an environmental study shortly. Unless there are issues with this study, a formal announcement is expected from Shell for the go-ahead on the $2.5 billion cracker before the end of this year.
It is also expected that the project will include a polyethylene option with the company working to secure supplies of ethane. Interestingly, it appears that while the investment is being made in North America, the company views it more as an international investment as it will potentially have access to export markets via Sunoco Logistics’ Mariner East ethane export terminal as well as Enterprise Products Partners’ recently-announced ethane export along the Gulf Coast via the ATEX Pipeline.
Earlier this month, Shell contracted with the Linde Group for 10 years to build cracking units on a global basis, which will include the proposed Pennsylvania cracker should the project move forward.
When asked to comment on this story, a Shell spokesperson told Midstream Business that the company is in the FEED phase of the project and continues to evaluate the proposed facility. "A number of steps remain before Shell will be in a position to make a final investment decision," the spokesperson said.
Recommended Reading
Range Resources Plans Flat Production Target in 2024
2024-02-23 - Gas producer Range Resources is focusing on system flexibility to respond to market trends.
Antero Poised to Benefit from Second Wave of LNG
2024-02-20 - Despite the U.S. Department of Energy’s recent pause on LNG export permits, Antero foresees LNG market growth for the rest of the decade—and plans to deliver.
ARC Resources Adds Ex-Chevron Gas Chief to Board, Tallies Divestments
2024-02-11 - Montney Shale producer ARC Resources aims to sign up to 25% of its 1.38 Bcf/d of gas output to long-term LNG contracts for higher-priced sales overseas.
Turning Down the Volumes: EQT Latest E&P to Retreat from Painful NatGas Prices
2024-03-05 - Despite moves by EQT, Chesapeake and other gassy E&Ps, natural gas prices will likely remain in a funk for at least the next quarter, analysts said.
Midstream Builds in a Bearish Market
2024-03-11 - Midstream companies are sticking to long term plans for an expanded customer base, despite low gas prices, high storage levels and an uncertain political LNG future.