Shell accelerates property pursuit in Beaver County

Now negotiating with firms near Horsehead plant

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Royal Dutch Shell has intensified its efforts to buy properties surrounding the Horsehead Corp. zinc smelting plant in Monaca, which the energy company is evaluating as a site for a multibillion-dollar ethane cracker.

Shell has been negotiating with businesses along Route 18 in Beaver County for an option to buy their land in the next year. In the past several months, the company has also approached residents along the same stretch. It is also studying a road construction project near the plant.

Shell selected Monaca for its proposed cracker in March 2012. Since then, it has extended its land option agreement with Horsehead twice to buy more time as it considers environmental, site and economic factors.

Mark Petrik, owner of Midway Bar & Grill, a quarter-mile from the Horsehead plant, was contacted by the energy company in the beginning of the year about selling his property. While he declined to give details about his agreement with Shell, he said the bar would be operating until Dec. 31, 2014. "I just hope it goes through," Mr. Petrik said. "It would be good for the area."

A number of businesses and residents declined to be identified for this story, citing ongoing legal negotiations with Shell.

"I understand there were some offers made," said Joe Spanik, Beaver County commissioner. "I think that's a good thing. That shows this is moving forward."

He said there also has been talk of Shell pursuing nearby parcels for possible office space. "That could be on Pleasant Drive or behind the mall."

Kim Windon, a spokeswoman for the company, confirmed the company "has been in contact with a limited number of landowners around the site" but said Shell "will not discuss on-going negotiations."

A decision on whether it will build the cracker is expected next year. The plant would take oil and gas and break them up into smaller molecules, utilizing the ethane produced by fracking. An ethane cracker creates ethylene, a compound used in the manufacture of plastic.

Rumors the cracker project may be in danger took hold when Shell's CFO, Simon Henry, told investors during a quarterly earnings call Oct. 31 that the company will have to choose among three, large capital project opportunities currently under evaluation -- a proposed project to export liquefied natural gas from Canada, a gas-to-liquids facility in the Gulf Coast, and the cracker in Beaver County.

"We can't do all of these," Mr. Henry said. "We will need to make choices which go forward." But Shell has kept a poker face throughout the speculation as its employees have continued work around the site.

Already, a traffic impact study has been completed on a plan to move a half-mile stretch of Route 18 near the Interstate 376 interchange further inland, away from the Ohio River, Ms. Windon said. "The highway presently passes directly through the proposed site," she said. "The change would move Highway 18 to the southern edge of the proposed site, enhancing community safety and improving highway access."

If it proceeds, Shell will pay for all the work.


Anya Litvak: alitvak@post-gazette.com or 412-263-1455.

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