How Shell plans to use rail and road to capitalize on opportunities in Beaver County
Nov 27, 2018, 1:43pm EST
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PAUL J. GOUGH
The quench tower almost completely in place around noon.
Shell Polymers — the division of Royal Dutch Shell (NYSE: RDS.A) that will market and ship the polyethylene from the company’s new plant in Beaver County — counts location and transportation opportunities as major competitive advantages over its competitors.
The bulk of the country’s petrochemical industry is based along the Gulf Coast, far away from the shale fields of Pennsylvania. But it’s also more expensive to ship the polyethylene, the building blocks of plastics products, to the customer base in the Midwest and Northeast.
That’s where the Shell plant offers reliably sourced polyethylene and a more nimble transportation infrastructure, said O. Chris Jackson, production unit manager for logistics at Shell Polymers. Jackson said the Shell plant will be within 700 miles of the customer base and will be connected not only by rail but also by road.
“That puts us closer to our customers,” Jackson said.
It means a shorter supply line but also, in the case of pipeline or railroad disruptions, it positions the polyethylene that comes out of Beaver County to be a quicker alternative than supply lines that depend on rail access. Jackson said customers said it could take between four and five weeks to secure a rail car, which forces petrochemical plants to curtail or shutdown production.
That’s where Shell’s new system works well. While the bulk of product transport will be by rail, Shell built 42 loading bays on the Potter Township site that will allow it to offer customers the ability to get the polyethylene by truck in only a day or two. That will allow Shell’s manufacturing customers to not be constrained by traditional supply delays, thanks to the location of the plant and the ability to ship by either road or rail.
“This kind of operation can flourish in this region,” Jackson said. Jackson spoke at the Tri-State Infrastructure Summit in Cranberry Township.
Shell has made significant investments in both rail and road, even moving a state highway that would have cut through the site of the plant.
Paul J. Gough
Pittsburgh Business Times