PITTSBURGH (AP) - Shell Chemical LP has extended its option to buy Pennsylvania land that could become a multibillion-dollar petrochemical plant and recently bought an adjacent property.
Horsehead Corp., which owns the 300-acre site in Monaca where the Shell plant would be located, said the new agreement includes plans to start demolishing an existing zinc plant in early 2014 at Shell's expense.
Shell spokeswoman Kimberly Windon confirmed the agreement Thursday. She wrote in an email that the demolition work will begin preparing the site for potential construction, but she stressed that Shell "is continuing its evaluation and has yet to make a final decision to proceed" with the project.
On Dec. 18, Shell purchased 5.5 acres of land adjacent to the Horsehead site for $1.87 million, according to Beaver County property records reviewed by The Associated Press. That parcel had been owned by another company.
Shell chose the Horsehead site, about 35 miles northwest of Pittsburgh, in March 2012 but has cautioned that it would be several years before a final decision to build was made.
The so-called ethane cracking plant would convert ethane from bountiful Marcellus Shale natural gas liquids into more profitable chemicals such as ethylene, which are used to produce everything from plastics to tires to antifreeze. A cracker plant looks very similar to a gasoline refinery, with miles of pipes and large storage tanks. The final complex could cover several hundred acres.
The Pittsburgh Regional Alliance, a business development group, welcomed the news.
Regional Alliance President Dewitt Peart said in a statement that the planned demolition activity "is an important step forward in making the proposed petrochemical facility a reality."
Ohio, West Virginia and Pennsylvania had all sought the plant and offered Shell major tax incentives. Monaca is about 15 miles from both the Ohio and West Virginia borders, so workers in all three states are likely to benefit.
Chemical Week, an industry publication, reported in October that Shell has chosen the multinational engineering firms Bechtel Corp. and Linde AG of Germany to do feasibility and pre-project planning for a possible Monaca plant.
The potential for a major new industrial plant is an unexpected turn for a region that became known as the Rust Belt. Horsehead is in the process of relocating to North Carolina, and had already started shutting down its zinc plant, which once employed over 600 workers.
Shell, which has its U.S. headquarters in Houston, has estimated that a new cracker plant could employ several hundred people, lead to the growth of related businesses and create up to 10,000 construction jobs.