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Permalink Reply by Gary on November 7, 2014 at 6:20am

Shell (Finally) Buys Site for Cracker Plant in Beaver County, PA
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Bookmark We’re still a long way from a decision by Shell on whether or not they will build a $2-$3 billion ethane cracker plant in Beaver County, PA. However, today the company took another giant step forward in that process. Shell has told the current owner of the site, Horsehead Corporation, that Shell is exercising their option to buy the property…

We’ve been writing about the Shell ethane cracker plant deal since it was first announced in 2012 (see our list of Shell cracker stories here). Shell has been stringing along Horshead since the beginning. Horsehead did have an operating zinc plant at the site which they had already decided to close. But since the beginning of 2013 Shell has been telling Horsehead they would make a decision about purchasing the property “soon” (see Shell Delays Buying Site for PA Cracker for 2nd Six-Month Period). It only took Odebrecht about a month to purchase the land where they plan to build a cracker in Wood County, WV (see WV Cracker Plant has Already Purchased Land for Future Site).

Shell has finally committed–at least to purchasing the land/site where they maybe, might, possibly will build their cracker. But Shell hasn’t said a word about purchasing the site (yet). We had to get the news from Horsehead:

Horsehead Holding Corp. (NASDAQ: ZINC) today announced that Shell Chemical LP has exercised its option under the Amended and Restated Option and Purchase Agreement between Shell Chemical LP and Horsehead Corporation to purchase the site of Horsehead Corporation’s facility located in Monaca, PA. No closing date has been established.(1)
Here’s a slightly longer version, from the AP:

Shell Chemical LP has exercised its option to buy a former zinc plant in western Pennsylvania, which it hopes to convert to a petrochemical plant.

Horsehead Holding Corp., which owns the plant in Potter Township, Beaver County, announced the deal Friday. The company hopes Shell will close on the sale next year.

Shell hasn’t formally committed to building the plant, which would convert ethane from Marcellus Shale natural gas liquids into chemicals used to make plastics, tires and even antifreeze.

Shell Chemical vice president Ate Visser tells the Pittsburgh Post-Gazette exercising the option “is a good decision” but doesn’t mean Shell has made a final decision to build the plant.

Shell has said it may take years to decide whether to build the plant about 25 miles northwest of Pittsburgh.(2)
(1) Horsehead Holding Corp. (Nov 7, 2014) – Horsehead Receives Option Exercise Notice from Shell

(2) AP/New Jersey Herald (Nov 7, 2014) – Shell exercises option to buy former zinc plant

Permalink Reply by craig on December 21, 2014 at 10:53am

A customer of mine who was working on the demolition of the Horsehead site stopped in on friday and said he wasn't sure he would be back(he lived just North East Pittsburgh. Seems all the demolition has been done for the contract they had. Don't know if they tore down the Midway Bar yet. Was also told by someone else that they moved some double wide trailers on the site somewhere. Anyone drive past there recently?

I believe they still have a fair amount of thick concrete that needs broken/cut up and removed though. I'll have to wait and see if anyone from that crew comes back in. If they do I'll ask them for info.

Permalink Reply by cattlerancher on December 21, 2014 at 12:29pm

As of Friday, 12-19, the Midway Bar had not been torn down.  The building has been gutted but the shell of the building remains.  It certainly looks like its going to be torn down in a very short period of time.  I suspect that things will heat up in January.  I understand that Trumbull Corporation won the contract to remove 7 million cubic feet of soil from the property.  They have been working there since early December, if I am not mistaken.  But a job that size is going to take quite some time.

Permalink Reply by Gary on January 8, 2015 at 1:56pm

I just saw this link on the general posts..I found it interesting..also read an articale yesterday that X Gov Corbit made a statement that he thought Shell would make an anouncement in the first half of 2015...Also whet buy the site today and they are ready to tear down the Midway Bar...the building is gutted..also there are a few permits issued to do blasting on the site.. heard that contracts were signned to move dirt...

 http://gomarcellusshale.com/forum/topics/royal-dutch-shell-activity...

Permalink Reply by joe on January 9, 2015 at 4:02am

http://www.timesonline.com/news/local_news/last-horsehead-smokestac...

Permalink Reply by Trapper on January 9, 2015 at 4:15am

Wonder why they haven't closed on the purchase yet?

Permalink Reply by craig on January 9, 2015 at 6:34pm

Waiting for some more gov't papers or permits possibly? There are so many variables to use in the decision making process, it won't be easy for them.

Permalink Reply by mark ondrusek on January 10, 2015 at 3:16am

i talked to a guy who works for shell this week.  he said they spent 700million on a site down south and walked away!   he also said that 700 million to them is like 700 hundred dollars to us!...fyi

Permalink Reply by Jason on January 10, 2015 at 7:32am

Mark, even if they walk, they are cleaning up that perfect riverfront property for the next company to build there.

Permalink Reply by mark ondrusek on January 11, 2015 at 1:54am

i agree jason..but i am praying they do not walk!  would be great for beaver county!

Permalink Reply by Trapper on January 11, 2015 at 2:30am

Clues may lie with Rex and how they move to develop Shells old leaseholds. A good portion of southern Lawrence county leases come up for renewal beginning this year through 2016.

Permalink Reply by cattlerancher on January 16, 2015 at 5:07am

The Midway Bar on Route 18 was torn down yesterday.  My guess is that there are probably 100 people working on the old Horsehead site everyday.  Again no guarantee Shell is going to proceed with the project, but it sure looks promising.  I don't know if this is right but if natural gas prices are low doesn't that make their cost for ethane go down, which is their supply cost.  I guess what I'm thinking is if gas and oil prices go up Shell obviously wins, but if gas prices go down, they are now insulated from low prices because it will be cheaper to supply the cracker plant.  They would have a hedge against price changes.

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