Negotiations ongoing with Shell, Pa. official says
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HARRISBURG -- A $1.65 billion tax credit proposal for ethane-processing facilities is related to the administration's ongoing negotiations with Shell Oil Co. to build a plant in Western Pennsylvania, Lt. Gov. Jim Cawley told reporters this morning.
Mr. Cawley said administration officials agreed not to talk about discussions with Shell outside the negotiating table, except for subjects such as the proposed $66 million annual tax credit, which requires legislative approval. He declined to speculate on whether the tax credits are a make-or-break portion of those talks.
"I can't say how much Shell places a priority on this," Mr. Cawley said. "That's more of a question for Shell."
Mr. Cawley said the March announcement that Shell was considering a site near Monaca for an ethane-processing facility was to indicate that the company "would stop their due-diligence in Ohio and West Virginia and focus exclusively on the Beaver County site."
He said a no final package of financial incentives or other agreements had been offered at that time, and that negotiations between state officials and the company were continuing.
In a statement yesterday, Shell said it "continues to evaluate our proposed project over a range of potential market conditions."
"We will carefully consider it as one of a variety of factors to determine the economic viability of our proposed petrochemical project before taking an investment decision," wrote Shell spokeswoman Kayla Macke, adding that the company "supports and endorses" local incentive programs.
The 25-year ethane tax credit, which is expected to be introduced in the Legislature later this week, will be aimed at attracting more facilities that process gas liquids, according to officials at the Department of Community and Economic Development. Companies would be eligible for a credit of 5 cents per gallon of ethane purchased in Pennsylvania, for up to 20 percent of their eligible tax liability.
It would begin in 2017, which is when the Shell plant would start operating under current timetables.
"I think that every signal we can send to Shell that we are serious about siting their location in Beaver County as quickly as we can do so is obviously going to aid us in making sure that they are breaking ground here in Pennsylvania soon," Mr. Cawley said.
First Published June 5, 2012 12:48 pm