Energy. Environment. Economy.

Businesses already betting on proposed ethane cracker in Beaver County

Royal Dutch Shell is still mulling over its proposal for a multi-billion dollar ethane cracker in Beaver County. However, businesses are already betting on the plant that would break down natural gas liquids into building blocks for manufacturing.

The Pittsburgh Tribune-Review reports new hotels and housing could be on the way to Beaver County as engineering firms and other businesses look to get their piece of the pie:

At Ambridge Regional Distribution & Manufacturing Center, 11 miles up the Ohio from the Shell site, they’re planning for a 25- to 30-mile zone for spin-off businesses, said Gene Pash, president of site owner Value Ambridge Properties Inc.

In part because of the cracker, the company is working on its first master plan update in 25 years. Its new plan maps out the addition of as many as six new buildings to provide top-class office and workspace for expanding industry, Pash said.

“We’re moving forward at warp speed,” he said. “The cracker will be bigger for us than the drilling. … The drilling will come and the drilling will go; the manufacturers that use that (gas) will be here for a long time.”

Other businesses expanding their reach into Beaver County include engineering firms looking to work with energy-related industries and communities as they build infrastructure.

“My opinion is, things are going to happen there with or without Shell. Shell could be the tinder on the fire,” said Marty Muggleton, chief development officer for Williamsport-based Larson Design Group.

The portion of Marcellus Shale that lies beneath much of western Pennsylvania is rich in “wet gas” or natural gas liquids like ethane and propane. These liquids are more valuable than “dry gas” – methane alone – because they can be broken down or “cracked” into smaller molecules and used to make plastics.

That’s why state officials from Governor Tom Corbett on down hope Shell will commit to building the plant and jump-start a manufacturing boom in western Pennsylvania.

“I feel better today than I did when I was here last year that we will see this happen, that there will be announcements during the course of this year, that people will have assurance that we’re probably going to see this facility built,” Corbett said in January at an event with the Greater Philadelphia Chamber of Commerce.

Analysts say Shell is being cautious about its investments after coming up short in profits in 2013. The company has extended its option to buy the site of a former zinc smelter three times. The Tribune-Review reports Shell’s final deadline is coming up in April, according to Beaver County Commissioner Joe Spanik:

Shell leaders will be updating a working group of local and state officials on Thursday in Hopewell, Spanik and Commissioner Dennis Nichols said. The parent company has been facing sagging profits and last week its global leaders said they will cut capital spending by a fifth and pull back from some shale development in the United States. Shell has, however, continued to invest millions into Beaver County. It spent $1.87 million in December to buy the 5.5 acres home of Cubbyhole Self Storage on Frankfort Road to help reroute Route 18 along the Horsehead site. Shell talked to other property owners in the area, the seller said. Shell is also paying for ongoing demolition work to help clear part of the Horsehead site, both companies have said.


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