“Enduring U.S. shale production enables greater opportunities for Marcus Hook Industrial Site,” according to a new  study released by IHS this week.

This study is an update to a 2012-commissioned report, which identified seven key recommendations for Marcus Hook to re-emerge as an energy hub. Three years later, IHS researchers not only confirmed their initial predictions but also found the economic environment to redevelop Marcus Hook into a global energy hub is “even better than predicted.”

Commenting on the study’s findings and Marcus Hook’s shale-driven rebirth, Delaware Co. Councilman John McBlain said:

“The redevelopment of Marcus Hook Industrial Complex represents a rebirth for the site, but more importantly, it represents renewed economic opportunities for the community and the generations of families who have relied on Marcus Hook for their livelihoods. The ongoing investment and development in the MHIC and adjacent sections of the County’s Delaware River shoreline today are fueling the revival of Delaware Co. as a dynamic, global energy hub.”

Key study findings include:

  • Abundant Shale Reserves Drive Redevelopment: Several factors – including the phenomenal, enduring growth in natural gas liquids (NGLs) production from the U.S. shale plays and significant pipeline capacity additions – have combined to make redevelopment of the Marcus Hook Industrial Complex (MHIC) in Delaware Co., Pa. more favorable.
  • Construction of a Propane Dehydrogenation Plant: IHS continues to recommend the construction of a propane dehydrogenation plant to make propylene for Braskem’s existing polypropylene plant at the Marcus Hook site, using shale-based propane from Marcellus shale.
  • Favorable Location for Global Exports: In terms of logistics, the MHIC site has excellent transportation accessibility as it sits on the river, is served by rail, located only a few miles from an interchange on I-95, and it is close to operating oil and natural gas pipelines. … Shorter transport distances generally mean less cost and quicker delivery times for importers of these products.
  • Total Employment Could Reach Previous Levels: Total employment figures for the recommended reuses include both full-time employees operating personnel and contract workers. The sum of reuse employment and current levels of employment at the MHIC could result in total employment at the site that will approach the level that existed when the refinery was operating at full capacity.
  • Energy Hub Would Support Additional Regional Jobs: MHIC’s likely role as the central component in a world-class petrochemical complex along the Delaware River, including potential marine and rail transport activities, will enable the creation of a large number of additional direct jobs throughout the Greater Philadelphia Region.

Here’s what they’re saying:

  • Shale Gives Marcus Hook an “Economic Second Life”: An “economic second life” could be coming to the Sunoco Marcus Hook Refinery site. The Delaware Co. council was presented with the findings of a phase-two study on Tuesday that looked at how to best redevelop the site. (WPVI-TV, 10/20/15)
  • Marcus Hook’s Rebirth “Would Bring Thousands of Construction Jobs”: Delaware Co. council members are optimistic as they unveil phase-two of the study looking at redevelopment of the [Marcus Hook Industrial Complex]. Phase one of the study started in 2012 after Sunoco announced it was closing its refinery and eliminating 500 jobs at the Marcus Hook Industrial Complex. … Three-plus years later, and [Councilman] McBlain says as many recommendations are in being implemented, they’re looking at results of phase two, which calls for nearly $1.5 billion in capital improvements that the councilman says would bring thousands of construction jobs. “And would employ hundreds of full-time men and women in good paying jobs that will sustain families after these plants are built.” (KYW-TV, 10/20/15)
  • “Delaware Co. is Positioned to be a Major Player” in Global Energy Market: Phil Hopkins, director of consulting, economic and country risk for IHS, said the report not only confirmed the earlier findings but found the environment was even better than predicted. “I think that first of all we largely confirmed the findings found three years ago,” he said. “So I guess we like to say we got it right. And then the biggest finding was how much more larger was the natural gas liquids that are coming here.” Sunoco Logistics’ Mariner East 1 pipeline is bringing 70,000 barrels a day of ethane and propane from the Marcellus Shale. Its second phase has the capacity to 680,000 barrels per day upon completion. Reviewing the viability of some of its earlier suggestions, the study determined that a natural gas liquids processing facility, at an investment of $300-400 million, would result in a minimum of 50 full-time jobs and 50 contractor jobs.  … “We know there is an emerging global interest in the energy marketplace,” Councilman McBlain said. “Delaware Co. is positioned to be a major player.” (Del. Co. Daily Times, 10/20/15)
  • Re-developed Marcus Hook to Benefit Local Manufacturers: IHS recommended the construction of a propane-dehydrogenation plant to make propylene. The dehydrogenation plant would consume some of the Marcellus Shale natural-gas liquids that Sunoco Logistics Partners has started to deliver by pipeline to the Marcus Hook complex. IHS said most of the propylene made at a new facility could be sold to petrochemical company Braskem’s existing polypropylene plant in Marcus Hook. If Sunoco Logistics is able to find other customers for the propylene, IHS said, the plant’s capacity could be substantially greater. (Philadelphia Inquirer, 10/20/15)

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