Mammoth Cracker Plant Presents Huge Opportunity

MONACA, Pa. – The enormous Royal Dutch Shell petrochemical complex taking shape along the Ohio River in Monaca, Pa., is quite a sight.

Sprawled across the 386-acre site in Beaver County are multiple buildings from one-level units to structures several stories high – and construction cranes that reach into the sky.

On the ground are 7,500 workers daily – 1,000 on the night shift.

“We are at the peak construction phase,” says Shell spokesman Ray Fisher. “Site workers have erected all of the larger vertical structures, and we are at the stage where we are connecting everything via many miles of pipe and building out the electrical scope across 386 acres.

“To give you a sense of how extensive that work is, one of the site’s units – the ethane cracker – contains a network of 95 miles of pipes,” he continues.

When the plant begins operations in “the early 2020s,” it will employ 600 workers and produce more than one million tons of plastic annually.

But more significantly, it will be the watershed event that could lead to 100,000 spinoff jobs created this decade as related plastics and chemical industries develop across the region.

Given the concentration of wet gases found in the Marcellus and Utica shale plays in the Greater Pittsburgh region and eastern Ohio, and the extraction of these gases through the hydraulic fracturing process that took hold here a decade ago, the region could accommodate four more ethane cracker plants, experts say. And at least two are being actively explored.

ExxonMobil Corp. scouted locations last fall in Beaver County for construction of its own ethane cracker plant, according to published reports. And in Ohio, PTT Global Chemical America continues to evaluate the possibility of developing a cracker plant on a site in Belmont County.

“We anticipate a final investment decision in the first half of this year,” says Dan Williamson, spokesman for PTT Global and its partner, Daelim Chemical USA.

JobsOhio, the state’s private nonprofit economic development corporation, has provided PTT more than $70 million in grants to underwrite the project.

“JobsOhio’s assistance facilitates the efforts of PTTGCA and Daelim Chemical USA to move forward on critical site-related engineering and site preparation work in a comprehensive and timely manner,” says JobsOhio spokesman Matt Englehart.

PTT’s Belmont County cracker would provide a “significant boost” to the regional economy, bringing billions of dollars of investment, thousands of local construction jobs and hundreds of high-paying jobs at the plant itself, Englehart says.

“There’s just unbelievable amounts of opportunities” that will spin off from the cracker plants, affirms Tom Humphries, who recently returned as president and CEO of the Youngstown/Warren Regional Chamber. “Everybody is aware of it and we’re trying to get everybody in a room and refocus on it.”

In recent years, the potential of the petrochemical industry hasn’t received the local attention that Humphries says it warrants and the situation is one that he intends to rectify.

The emerging oil and gas industry was a major initiative of the Regional Chamber in the early years of the past decade, during Humphries’ previous tenure at the chamber helm. Guy Coviello, now president of the Regional Chamber Foundation, also “provided leadership in that space” but was directed to “other things that were of higher priority,” Humphries says.

The chamber’s refocus comes as development agencies across the five-county northeastern Ohio-western Pennsylvania region are active in their efforts to capitalize on the plastics and chemical factories likely to locate in the vicinity of the Shell cracker. These efforts include in-depth analysis of the potential and marketing available industrial sites.

The petrochemical industry is “a 200-year opportunity” that includes the supply chain, production and end users, Humphries says. Youngstown State University has been gathering data about the industry and the economic prospects it represents, he adds.

“We’re in the process of getting everybody engaged so that we can get them all in one room. I hope we can accomplish that as a community in the next two to three months, then start to develop the strategy of how we’re going to approach the opportunities,” Humphries says.

“You have to have a plan to be able to accommodate that industry.”

Several “good players” are already involved, according to Humphries. Team NEO, an economic development entity focused on northeastern Ohio, has an individual on staff who specializes in the oil and gas industry, and Jobs Ohio’s vice president has an energy background, he notes.

Pittsburgh’s Allegheny Conference on Community Development, with whom Humphries says he spent “a lot of time” discussing shale, has five people dealing with the oil and gas industry in Pennsylvania – and by extension, the projected petrochemical boom.

“What we’re talking about is just trying to get everybody to focus on the petrochemical opportunities in the three states – Ohio, Pennsylvania and West Virginia – and what lanes everybody operates in and who will facilitate that,” Humphries says.

The chamber’s renewed petrochemical focus will be announced at its 2020 Annual Meeting. Majida Mourad, vice president of government relations for natural-gas company Tellurian Inc., will be the keynote speaker at the March 19 event.

Meanwhile, concentration on the opportunities presented by the petrochemical industry is sharpening throughout the region as other economic development agencies plan outreach initiatives.

Columbiana County is “geographically blessed,” says Penny Traina, CEO and executive director of the Columbiana County Port Authority. Upriver on the Ohio River is the Royal Dutch Shell plant, while downriver to the west is the PPT plant being considered for Belmont County, she notes. Potentially, there could be five plants on the Ohio River.

“The Ohio River is the biggest attraction for this industry,” Traina says, noting that cargo can be shipped less expensively on barges than on land vehicles.

According to a report by W.R. Coles and Associates, one barge carries the equivalent of 16 rail cars or 70 large semis and tractor-trailers. A 15-barge tow and towboat can carry the equivalent of six locomotives and 216 rail cars or 1,050 large semis and tractor-trailers. A 15-barge tow can carry 26,250 tons, compared with the 11,880 tons that a 108-car train can transport.

The port authority is positioning Columbiana County for petrochemical development by studying the plastics and rubber companies already operating there and by marketing the county to others that might consider coming there. And it is working with the Small Business Development Center at YSU and its import-export center to assemble regionwide data.

Among the possibilities are companies that would supply parts for petrochemical companies as well as chemical, plastics and metal fabricators downstream, Traina says.

“We obviously want to prioritize what companies need,” she explains. “We’re looking at the whole supply chain that would affect Columbiana County and the region. We want to work with our regional partners.”

In Mercer County, Pa., Penn-Northwest Development Corp. identifies a couple of initiatives in its 2020 program of work, reports President and CEO Randy Seitz.

One of them is working with Butler, Lawrence and Mercer counties to promote and market Interstate 376 – from the Shell cracker plant to the Sharon area – as the “petrochemical corridor,” Seitz says.

“I’m not sure if that will be the name of it ultimately, but we want that 376 route to be known to the petrochemical world,” he says.

For the past four years, Penn-Northwest has reached out to companies involved with manufacturing plastic packaging such as bottles, cleaning supplies and pharmaceuticals – “any manufacturer that uses polyethylene derivative in their manufacturing process,” Seitz says.

The objective is to make them aware that the ethane cracker Shell is building would provide them with a low-cost option for raw materials and that Penn-Northwest has “some affordable solutions in our community” for any company looking to expand.

“Last week alone, we sent out probably 25 introductory emails to 25 different plastics-related companies letting them know we have sites available and we’re just a few miles away from the cracker facility,” he says.

In addition, Penn-Northwest is spending money on digital fencing to put local opportunities on the smart devices of U.S. site selectors working with plastics companies and people attending industry trade shows.

Camion Associates of Sarasota Springs, N.Y., and Civil & Environmental Consultants Inc., Pittsburgh, prepared a report on opportunities in the petrochemical supply chain for the Northwest Commission in Oil City, Pa., which covers an eight-county region that includes Mercer and Lawrence counties.

The report identified Sharon and New Castle among 10 “hot spots” in the eight-county region that are most likely to meet site selector requirements for transportation and utility capabilities.

Achieving the “full potential of petrochemical-related opportunities” will require stakeholders to accomplish three main goals: identify and prepare physical sites, attract and retain investment and build organizational capacity, the report states.

“The biggest thing that we know we need to do is identify and have physical sites that are shovel ready,” says Linda Nitch, director of economic development for the Lawrence County Regional Chamber of Commerce.

The Lawrence chamber is also taking a regional approach in its efforts, Nitch says. The chamber is coordinating with planning offices in the eight-county region in western Pennsylvania to gather data on utility and transportation assets, wetlands, flood plains, geography and land use to have available in a geographic information system, or GIS.

“That’s low-hanging fruit that will really help us,” Nitch says.

FirstEnergy Corp. is working with local economic development agencies to promote their sites for petrochemical development, reports Lisa Nentwick, economic development adviser for the company. The utility will be represented at the World Petrochemical Conference in New Orleans this month, she says.

Development agencies are “positioned quite well with the sites they have available,” Nentwick confirms. “A lot of them are working with supply chain companies that would serve Shell in addition to the other prospects for plastics and petrochemical plants.”

A few sites in Mercer and Lawrence counties should be attractive, including the site on U.S. Route 422 in Mahoning Township previously proposed for a racetrack and industrial park property in Mercer County, Nentwick says.

“As the Shell plant gets closer to being complete, you’ll see a little bit more of that north migration,” she observes. “People expected to see that influx of business right away but it’s starting to happen now. We’re starting to see a lot more inquiries.”

Humphries envisions coordination among the three states, and potentially into upper New York as well. “This is such a huge opportunity for all of us. There’s so much there that you don’t have to worry, ‘Well, I have to get everything,’ ” he says.

And he believes the region’s response needs a single facilitator, although who or what organization might fill that role is undetermined.

“Once everybody is in the room, the group will decide how we will go forward with that effort,” Humphries says. “I want to do the problem-solving and identification process first so that we identify what the system’s going to look like to facilitate this going forward.”

Pictured: The Business Journal dispatched a drone Feb. 26 to photograph construction at the Shell plant site.

Copyright 2020 The Business Journal, Youngstown, Ohio.