How Will Shell’s Investment Decision Boost Beaver County?

A new era is about to begin for western Pennsylvania’s struggling shale-gas industry.

By Adriana Pop

Pittsburgh—In advance of the cracker plant development on the banks of the Ohio River in Potter Township, Royal Dutch Shell has increased its real estate holdings in Beaver County. The oil and gas giant recently acquired a 110-acre portion of the Stoney Ridge site in Center Township, close to Beaver Valley Mall, as well as another parcel at 419 Frankfort Road in Potter Township, the Pittsburgh Business Times reported.

Shell is building a petrochemical plant in Pennsylvania
Shell is building a petrochemical plant in Pennsylvania

Shell confirmed its long-anticipated investment decision earlier in June, after more than four years of feasibility studies. In March 2012, the company signed a land option agreement with Horsehead Corp. to evaluate a 300-acre site near Monaca, close to the Conway Railyards and about 15 miles from the Pittsburgh International Airport, where it could build the project.

Construction will start in less than 18 months, with commercial production expected to begin early in the next decade. Once complete, the multimillion-dollar petrochemical plant would chemically “crack” ethane into ethylene, the raw material used to make plastics and other materials. The facility will use low-cost ethane from shale gas producers in the Marcellus and Utica basins to produce 1.6 million tons of polyethylene per year.

The facility’s location is expected to benefit North American polyethylene customers, 70 percent of which are located within a 700-mile radius of Pittsburgh. What’s more, the project will bring new growth and jobs to the region. Up to 6,000 construction workers are involved in building the plant, and the project is expected to create 600 permanent jobs upon completion.

The ripple effect from Shell’s announcement will also create an almost immediate need for additional commercial and residential real estate.

Joel Kreider, a director in the Pittsburgh office of Newmark Grubb Knight Frank, told the newspaper that Shell’s investment decision has already spurred interest in the Mon River Industrial Park, an 800,000-square-foot former steel plant on more than 400 acres in the Washington County community of Allenport. The complex features rail, truck and barge access along with ample utility infrastructure. Meanwhile, PREIT is currently marketing for sale the struggling Beaver Valley Mall, located only a mile and a half away from the cracker site.

Rendering courtesy of Royal Dutch Shell