A Shell subsidiary began operations at its multi-billion dollar plastics plant near Pittsburgh, Pennsylvania, marking an important step in expanding its chemicals portfolio, the company announced last week.
Shell Polymers Monaca in Beaver County, Pennsylvania, is the first major polyethylene manufacturing complex in the Northeastern U.S. It is expected to produce 3.5 billion pounds per year after ramping up production over the second half of 2023, according to the news release.
“When this project was first announced, Gov. Wolf said this would be a game-changer for Pennsylvania’s economy and he is absolutely right,” Neil Weaver, the state’s acting community and economic development secretary, said in a statement. “This plant ... represents one of the biggest investments by a company in Pennsylvania since World War II.”
The new plant contracted most of its natural gas feedstock from the nearby Utica and Marcellus basins, per the release. It will take ethane, a byproduct of natural gas, from fracking operations and process it into plastic to be used in a variety of products, from food packaging to automotive components.
Given its proximity to gas feedstock, the plant, and its customers, will benefit from shorter, more dependable supply chains, compared to supply from the Gulf Coast, according to a Shell blog post.
It is also strategically located within a 700-mile radius of 70% of the U.S. polyethylene market.
The plant represents a move to diversify from the Gulf Coast, where Hurricane Harvey and other disasters have demonstrated the risks of having much of the nation’s oil refining capacity concentrated in one region.
Southeast Texas alone accounts for 30% of total U.S. refining capacity, and is one of the largest centers for natural gas and natural gas-derived materials manufacturing, according to the Department of Energy Office of Scientific and Technical Information.
The Pennsylvania plant has been in the works since 2012, with the passage of incentives as part of Pennsylvania's Resource Manufacturing Tax Credit to help revitalize the state’s manufacturing industry. Pennsylvania awarded Shell a tax credit amounting to $1.6 billion over a 25-year period to set up shop in the state.
“With great market access, innovative offers and connected infrastructure, Shell Polymers Monaca is well positioned and ready to service customers with high quality, competitive products,” Huibert Vigeveno, Shell Downstream Director, in a statement.
