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.
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