As you know, there are many hurdles to clear before we can even take an investment decision to build the proposed petrochemical complex. We need to confirm the suitability of the site, secure ethane feedstock supply, complete the engineering and design work, confirm the support of customers for our products, receive all the necessary permits and confirm that the project is economically robust and competitive,” said Kimberly Windon, US Media Relations with Shell Oil Co., in an email
I have always figured they plan to use their own ethane. In that regards there exploratory program in the NW PA area is very active and they seem to be going into production mode on a number of sites in the Butler/Lawrence/Mercer area.
Well while they keep scratching their head, PADD-3 well underway to getting start production next year. Just wondering how the East Resources buy out is really panning out for Shell/Oil Fund, that is on the liquids side in order to feed this, IMO long-shot of a self-reliant project.
I don't think they are scratching their heads. They are very calculating in what they do. One thing they have that others do is a market with customers for both energy and chemicals. In this regard I think Mariner East and West is very important to Shell. Whether they build a cracker or not will be determined by economics. I just don't know that much about the process and markets to be able to make any rational conclusion. I would like to see it as a PA resident, but it does not effect my investments.
I don't know how the East acquisition has turned out. They got a lot of rights in Tioga which in hindsight is west of the the super sweet dry gas rock in PA. I saw you mention in another thread RRC knew exactly what they were doing back in 2008. Really from what I have read and heard they did not. There was a very public debate at the time between RRC and Engelder as to where the Marcellus went out of SE PA. RRC said it went north to NW PA and Engelder was correct, it went to the NE. As a result RRC has a lot of acreage in NW PA, some owned with Cabot, while Cabot got the foothold in the NE. I am personally optimistic on the stacked shale from Butler on north in PA. Unfortunately most operators are real big or private and we hear nothing or very little. Production stats are either infrastructure or market restrained.
My concern is with MWE. They have bet the ranch on the Utica and to extent the Marcellus. I am high on Mariner East and West but I am not so high on the Bluegrass to the SE. I think the Eagle Ford and other shales down there will be more than enough to supply the ethane requirement down there and the NE Ethane is not going to be that competitive.