Houston to be ethane source point for Shell pipeline project

Michael Bradwell
Observer Reporter

A subsidiary of Royal Dutch Shell plans to build a 94-mile pipeline to carry ethane to the cracker plant Shell is preparing to build in Beaver County.

According to a statement released Wednesday by Shell spokesman Ray Fisher, the pipeline will carry ethane produced by natural gas drilling companies in the tri-state area.

The project will be built by Shell Pipeline Co. LP, and will be located in Southwestern Pennsylvania and extend into West Virginia and Ohio.

The proposed Falcon Ethane Pipeline System will connect three major ethane source points – at processing plants in Houston (Chartiers Township); and those at Scio and Cadiz in Harrison County, Ohio – all of which are in the rich gas portions of the Marcellus and Utica shale reservoirs.

Construction of the pipeline is scheduled to begin in late 2018.

The company said acquisition of rights of way for the project began this month.

According to Shell, Falcon’s initial pipeline capacity is expected to be a little more than 100,000 barrels per day of ethane.

On June 7, Shell Chemical Appalachia LLC announced it will build an ethane cracker plant in Monaca that will create as many as 6,000 construction jobs and 600 permanent jobs once it begins production early in the next decade.

According to an Associated Press story, the decision to build the plant came three years after Shell paid about $4 million extending land options on the former Horsehead Zinc plant in Monaca, then paying $13.5 million for the site in 2014. The company spent a similar amount to acquire adjacent properties, then committed to spending $80 million to clean up industrial contamination at the site.

As it continued to evaluate the cracker project, Shell also began establishing supplier contracts with the region’s natural gas drilling companies for the ethane for the plant.

Shell’s plant will crack ethane gas molecules into petrochemical building blocks that can be refined to create polyethylene, a plastic used in everything from food packaging to automotive parts.

At the time of its cracker plant announcement, Shell said the Beaver County site is ideal because the region’s gas wells will supply it and because 70 percent of Shell’s polyethylene customers are within 700 miles of it.

Shell estimated the plant will produce about 1.6 million metric tons of polyethylene a year. The company sells about 17 million metric tons of plastic each year.

Estimates from public officials and petrochemical industry experts on the plant’s construction cost have ranged from $2 billion to $6 billion. The plant also is expected to attract numerous plastics manufacturers to the region.