"The land in Beaver County is owned by Horsehead Holding Corp. ZINC -0.61% , a metal-processing company based in Pittsburgh. A Horsehead spokesman earlier said Shell's option on the land, which had been due to expire in early January, had been renewed but that terms were confidential.

Ms. Windon said in an email that the company was continuing to evaluate the site and hadn't made any decision on whether to proceed with the project. "The demolition work is being initiated to begin preparation of the site for potential construction," she said. That work is due to begin early in 2014."

Article in the WSJ today:

http://online.wsj.com/news/articles/SB10001424052702303799404579282...

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I went to the 11:00 to 2:00..when I got to Aliquippa at 10:45 cars were pouring in to the lot...inside the place was packed.


Shell had stations set up with employees at each station..they were there to answer any questions you have...at the one station there was a map of the proposed building site (attached)..


Lots of politicians from Beaver County…security everywhere…the atmosphere seemed to be very positive. One of the employees I talked with said he had been working on the gas to liquids plant project (Louisiana) for a couple of years and then it was canceled, he said that they are in the process of getting the required permits now and that they are also securing the feedstock for the plant..Shell plans on making plastic beads to be shipped by rail and trucks and that the docks were for bringing in building materials because somethings are too large to ship by rail or trucks..he said all of the ethane will be brought in by pipeline..the plan is to keep moving forward on the site preparation..


Listening to people asked questions was interesting..some were concerned about the traffic, some were worried that it would explode, some wanted to know about jobs, contractors wanted to know what they had to do to get involved in building the plant..


I talked with one lady that is involved with bringing business to 10 counties in the area..she said when Shell got here that noone knew what a cracker plant was..so Shell took them to the golf coast and toured a cracker plant..she said that Shell is very safety conscious..that when they got in the bus it didn't move until all people had their seat belts on..no cell phones in the front seat of the car..she said that Shell is very concerned about how the surrounding community feels about the plant and wants to address the concerns...she had nothing but positive things to say about Shell..


To be honest I didn't learn much new about what is going on.. thanks to everyone here on GMS, I think we are way ahead of most people on what is going on in the area..Shell was very none committal about building it but that they are not slowing down at this point..the plan is to build the plant unless the board of directors at Shell says no...the plant project people must convince the board to allot the money for the project...I think it is a go for now.


Now to the rumors that were floating around..and I am going to stick my neck out here..I MEAN RUMORS these were not from SHELL people..so you be the judge, these are a few good one: I know should have told you this first!!


2014 budget $680,000,000.00 yes with an M


Horse Head people out by the end of June


Feedstock is more than enough to run the plant for many years


Three more small crackers in the plans for our area (not including the one in WV)

 

Infrastructure needs to be in place to feed the plant (at least 4 to 5 yrs. till opening)

Training for local people to be funded by Shell


Rt 18 is approved to be moved

Permits have been submitted for state approval

 

If any one else was there please add to the list…that is my take on the meeting..Shell is going to have more of these meeting… I would recommend going.. arm yourself with questions….oh yeah they had free lunch!!

Attachments:
Thank you Gary.
Was there anyone from Shell there that is involved in Swepi's drilling and well operations? Curious to know if they will continue these efforts or simply just buy ethane from other producers.

I don't know if there was anyone there from the drilling side....when I asked where they would get the ethane he said suppliers? I said like Markwest and he said yes...I didn't here anything about their drilling and I didn't think to ask.

Thanks Gary.

Todd, sorry but it turns out my brother didn't go. However, after talking to a few of my customers that did go I'd say Gary's description is spot on. Not much new info for those of us that are informed.

I did talk to a gas industry person today and he tells me that the cracker project has been moving "swiftly" compared to other such projects. He believes it will take a major wrench in the project to derail it. 

Awesome analysis and excellent "Cliff's notes" Gary!
Thanks a bunch!
Thank you also Craig - good to hear.
Everyone have a Nice Easter!
Todd

This was one of two of the Shell speakers. I find it interesting that he says we plan on selling this plastic here locally.

http://www.bizjournals.com/pittsburgh/news/2014/04/16/shell-tells-b...

Excerpt from this PBT article:

"Pulling back some of the curtain on the company's timeline, Carlson said Shell was at the fourth stage of a six-stage process. The first three stages took about two years with another two years for the fourth stage, where Shell works out the project's engineering and design details and a final cost estimate. It will then take about four years to build if the decision is made."

So, we're still 2 years away from a final decision?!?

I wonder how Odebrecht was able to figure out that they were going to build an ethane cracker plant in Parkersburg, WV so fast? 

Could Shell be timing this based on local production and infrastructure build-out?

I think there is a bigger picture than we know..

True - I've heard that operators will be producing our oil and gas reserves for the next 100 years. So, 6 years is still the top of the 1st inning timing wise.

Just remember the ole adage that I adhere to…..

Watch what they do, not what they say.  I believe this is more relevant than ever with this project.

All here are a few questions that were asked to Shell during the Q1 report:

 

Theepan Jothilingam – Nomura International Plc

Thank you, good afternoon Simon. Two questions, please. Firstly, just on Arrow LNG, I think you – in one of the slides you talked about divestment or project reframing. So I was just – if you could give an update there whether you’re considering perhaps using some of that gas as third party into other CBM projects? And then the second question is, could you just give an update also on where you are on the pet chems project in the US, please?

Simon P. Henry- SHELL
Chemicals in the United States, this really I think is a question about potentially investment in Pennsylvania based on ethane source from the Marcellus field. It is a – remains a potential project, we are doing some front-end engineering and design work, but it is not yet a final investment decision. So there is still quite a bit of work to do to ensure first of all the costs and then secondly the margins at both ends, the sales revenues and the cost of the ethane are sufficient to support over 20 plus year lifecycle to support an investment upfront, would be a non-trivial investment, multi billion dollars if we have to go ahead. So it’s quite well at times, but we are still someway from the final decision.


Theepan Jothilingam – Nomura International Plc


Do you think that's an event for this year, or does that roll into 2015?


Simon P. Henry-Shell
That’s difficult to say, Theepan. Let’s look at it this way. There is a verity of chemical opportunities open around the world some of which are fairly clear. So Qatar is one of them and using ethane as the gas liquids plants obviously Iraq as we develop the gas projects and all projects in Iraq there is also potential supply there in Iraq. And we have ongoing potential in parts of Asia around Singapore, and in the Nanhai complex in China. We can't do all of that at the same time clearly, but we are – it’s an attractive overall set of options to develop growth in the Downstream business. So we’ll say thank you Theepan

.

Iain S. Reid – BMO Capital Markets Ltd.


A couple of questions, please; firstly on your North American shales, et cetera. Having taken this big write-down in the downstream, is there the intention to have a look again at your North American shale position and perhaps go for the same exercise? Particularly given the fact that you're selling some of these assets at what look like rock-bottom prices? And secondly on the scrip. I know you've answered this question before, but you talked about – and the buyback, actually.

You talked about the B share trading at a premium to the A share of 7%. It's been stubbornly at 7% now for some months and you’re kind of scaling back on the buyback because of that. It doesn’t look like that's going to change any time soon, and you've talked about the problems with the Dutch tax authorities. So isn't it perhaps time to give up on the scrip and kind of solve your problem that way?

Simon P. Henry-Shell


Thanks, Iain. And the first question on the U.S. shale, yes we’ll look again, we’ll be looking continuously and it is fair to say. But what we gave quite some granularity on I think in March is the different elements. We still have $24 billion, $25 billion on the balance sheet for shale, we’re reducing natural ongoing investment, while we evaluate certain of those basins further.

About two-thirds of that value within the Marcellus and the Groundbirch, both gas asset, one in Canada, one in the U.S., what we said before was the liquids asset that the remaining liquids asset by and large they look okay, and obviously still to be proven when we develop.

Appalachia and Groundbirch, it will depend on the pace of development. And also, in case of Marcellus, the quality of the asset is, we are still appraising that. The West Canada gas is a great resource. It is targeted at the LNG Canada project, having said that reversely the choice to go forward with that project may lead to lower investment if we reserve the molecules for LNG, which may actually trigger an impairment over time, because we’ll be investing less in the short-term. Those are the rules, we’ll see how that as we go forward. And that’s it’s not I wouldn’t realize any further impairment as we are still in the appraisal phase on the rest of the portfolio.

I think it’s fairly clearly flagged in the QRA as well. The scrip buyback, your comments are noted Iain. Thank you.

You be the judge...

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