A real estate trust specializing in the ownership and management of retail shopping malls may have provided a clue to Royal Dutch Shell Plc’s (NYSE: RDS.A) plans for its proposed $4 billion ethane cracker in the Northeast.
Development of a local world-scale ethane cracker has been the Holy Grail for many operators, producers and legislators in the Marcellus and Utica shale regions. The belief from most of the supporters of this development is that it will lead to a major energy hub in the Northeast. While a great deal of production from the Appalachian Basin would still be moved to the Gulf Coast, a hub closer to the production center would be a major plus to local economies as well as improving netbacks.
So far, the bulk of the interest has been focused on Shell’s proposed $4 billion cracker. The company has acquired 400 acres in Monaca, Pa., 25 miles outside of Pittsburgh in Beaver County, for the facility. Shell officials have declined to confirm if the project is moving fully ahead and instead comment on incremental steps taken.
Without any formal announcements forthcoming from the company, it has become necessary to depend more on third-party information to determine the project’s state. With that in mind, it is possible that a Beaver County shopping mall can help observers tell whether Shell is moving forward with its cracker.
The Pennsylvania Real Estate Investment Trust (PREIT) announced that Shell acquired more land in the area and leased part of the Beaver Valley Mall’s parking lot for “a significant amount of money,” PREIT CEO Joe Coradino said during the company’s recent call to discuss its first-quarter earnings.
“All indications are that Shell is going to go forward, but we also know what’s happening to the price of gas and continue to monitor,” he continued, adding that PREIT is planning to service the 10,000 jobs that the cracker project would create.
“We have some additional land at that property that we’re under an agreement with an adjacent landowner to sell property,” Coradino said. This property includes an office building and apartment complex. Further details were not disclosed by either Shell or PREIT on these agreements.
Frank Nieto can be reached at email@example.com.