Shell starts construction on $6B PA ethane cracker plant

Dive Brief:

Shell Chemicals has started construction on its new $6 billion ethane cracker plant in Potter Township, PA, which, when complete, will produce 1.6 million metric tons of polyethylene each year, according to The Times.
The company has already prepared the site, laid the foundation for plant construction and built infrastructure like bridges and roads around the property. The cracker plant will be the biggest part of the project, but Shell is also building a 250-megawatt natural gas-fired plant to power the ethane facility, as well as a cooling tower, loading facilities, a water-treatment plant, a laboratory and an office building.
The polyethylene the plant produces will be used to make a wide variety of items from furniture to food packaging. The project is also expected to employ 6,000 construction workers at the height of operations and provide 600 permanent positions once the plant is complete.

Dive Insight:

The term "cracker" refers to any plant that breaks up, or "cracks," oil or gas into smaller molecules, according to Penn State Extension, in order to make ethylene, which is then converted to polyethylene using a process called polymerization.

These plants are big moneymakers as well. During its latest earnings call, The Times reported earlier this month, Royal Dutch Shell said it expected the fully operational Potter Township plant to help add $3.5 billion to $4 billion of earnings each year to the company's chemical division.

Thailand-based PTT Global Chemical is also considering building an ethane cracker plant, according to The Times Leader, this one on the site of a now-demolished coal-fired power plant along the Ohio River in Belmont County, OH, near the West Virginia border. PTT said it will come to a decision about building the plant there by the end of the year.

Back in 2015, PTT said JobsOhio, the private economic development arm in Ohio, offered it an "aggressive incentive package," according to Columbus Business First, if it would build its cracker plant there. PTT said the proposal included tax credits for job creation, workforce training and infrastructure improvement grants and local tax credits.

According to National Public Radio, Pennsylvania gave Shell a 25-year, $1.65 billion tax credit to build its cracker plant in the state. Officials agreed to a 15-year tax amnesty and will give Shell a $2.10 tax credit for every gallon of ethane it purchases from state natural gas drillers.