Shell Signs Property Deal for US Shale Gas Project

In an updated property deal, Shell Chemical has exercised its option to buy Horsehead's zinc production site near Monaca, Pennsylvania, in the US, where it may build a major shale gas-fed petrochemical complex.

The land option deal was originally inked in 2012 and had been renewed on three separate occasions to allow Shell more time to evaluate the site, US reports said.

Although Shell said it has now determined that the Monaca site is suitable for the proposed complex, it said it had not made a final decision to go ahead with the project.

"The land purchase is a necessary step for Shell to advance the permitting process and allows us to proceed with some preliminary site development work," a spokesman told the US Oil and Chemicals Journal, adding that receipt of necessary permits and a full project evaluation will be required before a final investment decision can be reached.

Some preliminary site development work will be done when Horsehead completes clearing the site.

Shell's planned Appalachian petrochemical complex, first proposed in 2011, would include an ethane cracker with an average ethylene output of about 1.5 million t/y, three polyethylene units with a combined production of 1.6 million t/y, associated installations for power and steam generation, storage, logistics, cooling water and water treatment, emergency flare, and offices.

Feedstock for the proposed complex is expected to be supplied by Shell's recently reshuffled and newly discovered holdings in the Marcellus and Utica shale regions.