Shell Chemicals has been making progress on a petrochemicals complex designed to leverage affordable feedstocks from Northeast US shale-gas plays, the company said Thursday.
The company has been "ramping up construction" at the site in Potter Township, Pennsylvania, in the Pittsburgh area that will produce 1.6 million mt/year of polyethylene, Shell CEO Ben van Beurden said in a conference call to discuss fourth-quarter results.
"We are working our way through regulatory approval," he said. "A lot of site preparation is already done."
Shell has not set a startup date but has previously targeted early 2020s.
The site will host a seven-furnace ethane cracker which will feed into three polyethylene production lines -- gas-phased high density polyethylene, slurry HDPE, and linear low density polyethylene.
The location of the project is unique, as recent waves of US ethylene and polyethylene projects have almost exclusively targeted the US Gulf Coast.
The site will represent the largest ethylene and polyethylene capacities in the region, but Shell pointed to significant advantages in the location.
"It sits on top of the largest feedstock in the United States," van Beurden said.
Shell expects to feed the steam cracker with affordable ethane sourced from the Marcellus and Utica shale basins.
Additionally, more than 70% of North American polyethylene demand stands within a 700-mile radius of Pittsburgh, according to Shell.
"It's right in the middle of where the main polyethylene demand in North America is," van Beurden said.
Shell made final investment decision on the project in June. Shell exercised its option to purchase the site in November 2014. In August 2013, Shell said it had secured ethane supply commitments from Hilcorp Energy, Consol Energy, Seneca Resources and Noble Energy.
