Shell Chemical has signed an option to lease land in western Pennsylvania for a possible “world-scale” petrochemical complex including an ethane cracker that would use abundant natural gas from the Marcellus Shale field to make ethylene and other components for plastics.

The plant, which would be Shell’s fifth in the US, may be the largest industrial investment in the region for at least a generation, said Pennsylvania Governor Tom Corbett.

Corbett, a champion of the state’s booming natural gas industry, said that if the plant is built, it will support more than 10,000 direct and indirect jobs and an additional 10,000 jobs during construction.

“Projects of this scale are important as Pennsylvania seeks to develop a market for its natural gas supply,” he said in a statement. “The benefits to the state’s southwest and to all of Pennsylvania are immense.”

Demand Driver

The plant would be a boost for the gas industry which has drilled thousands of wells in Pennsylvania and other states since 2008 but has recently cut production in response to natural gas prices that have fallen to their lowest in a decade because of plentiful supply and an unusually mild US winter.

The site in Beaver County, about 35 miles northwest of Pittsburgh, is close to wells producing natural gas from the Marcellus Shale, one of the largest US natural gas fields. The western Pennsylvania portion of the Marcellus produces so-called wet gas containing liquids such as ethane whose value has not fallen in step with that of dry gas.

Access to liquids-rich natural gas was one of the factors Shell used to select the site, the company said in a statement. It also looked at water, road and rail connections, power grids, and sufficient space to accommodate the plant and any future expansions.

The plant may be the largest investment in the region in a generation

The planned ethane cracker would upgrade locally produced ethane from Marcellus wells in one of the most intensively drilled areas of the state. The plant may also include facilities for making polyethylene and monoethylene glycol.

“This is an important step for the project and we look forward to working with the communities in Pennsylvania and gas producers across Appalachia as we continue our efforts to develop a petrochemical complex,” said Dan Carlson, general manager of new business development for the chemical division of the giant multinational energy company.

Many Steps for a ‘Win-Win’ Project

The next steps in the project include environmental analysis, engineering design studies, assessment of the local ethane supply, and continued evaluation of the project’s economic viability, the company said.

Shell said in July last year that it intended to build an ethane cracker somewhere in the Northeast. The company was also courted by West Virginia and Ohio, whose governors lobbied with Shell to argue that the plant should be built in their states.

In the petrochemical industry, a cracker breaks oil and gas into their component molecules. An ethane cracker creates ethylene which is used for chemical derivatives that help make food packaging, bottles, pipes, carpets and other products.

Kathryn Klaber, president of the Marcellus Shale Coalition, an industry group, called the Shell announcement a “win-win” for the economy and the region’s work force.

“While located in Pennsylvania, the supply chain and potential economic impact of this project will span the multi-state region while serving as an anchor in the resurgence of the domestic manufacturing sector,” she said in a statement.