Shell Chemical LP, the petrochemical arm of Europe's oil giant
Royal Dutch Shell plc
), has received an extension to buy the proposed site for a
multibillion-dollar petrochemical plant in Beaver County from the
site's owner, Horsehead Corp., an affiliate of
Horsehead Holding Corp.
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The Amended and Restated Option and Purchase Agreement will allow
Shell to continue its evaluation process of the 300-acre Monaca
location. The agreement also states that Shell would bear the
cost of the demolition activities slated to start first quarter
next year at the Monaca facility. Demolition of the existing zinc
plant is a head start on preparing the location for the upcoming
project. However, Shell has not yet committed to any final
In Mar 2012, Shell had signed the agreement to evaluate the land
for the petrochemical complex. The plant is expected to convert
ethane from the liquid-enriched Marcellus Shale to produce
chemicals like ethylene.
Shell has been offered lump sum tax incentives to continue with
the plan. Once the petrochemical complex comes online, it will
benefit all the three areas of Ohio, West Virginia and
U.K.-based Shell is the largest oil company in Europe. Moreover,
the company has operations worldwide and is involved in various
activities related to oil and natural gas, chemicals, power
generation, renewable energy resources, and other energy related
However, the company's relatively heavy downstream exposure
leaves it less diversified than its integrated peers. As such,
the company's results remain greatly exposed to
refining/marketing margins. The company's downstream operations
have struggled recently from weak demand for fuel, leading to
lower returns in this segment.
Royal Dutch Shell currently holds a Zacks Rank #4 (Sell),
implying that it is expected to underperform the broader U.S.
equity market over the next one to three months.
Meanwhile, one can consider better-ranked energy players like
Harvest Natural Resources Inc.
). Both these stocks currently sport a Zacks Rank #1 (Strong