Shell's $4B Pa. ethane project more likely as rival works cancelled: report

Shell's ethane facility in Singapore. (Photo from Shell Chemical and

Plans for a taxpayer-backed $4 billion Shell Corp. ethane fuel plant near Pittsburgh are advancing as Shell cancels other projects, including a $10 billion gas-to-liquids plant in Louisiana, that are potential competitors for capital investment, reports McGraw Hill-Platt's The Barrel, a fuel industry newsletter, here.

So much ethane liquid is coming up with Pennsylvania's Marcellus Shale natural gas that pipelines are tapping into the state to receive it, The Barrel notes. Ethane is a rich base for producing plastics and other chemicals -- if there are convenient plants to process it. But ethane supplies are building up so fast it may be cheapest to burn as fuel, until Shell or someone else builds a regional plant so it can be converted to useful raw material, the Barrel notes.