The Shell Game

I thought I would wait 24 hours after the announcement of the final investment decision by Shell to let the newspapers have at it before a follow up post. Yesterday’s news was certainly good for the regional economy and helpful for the recruiting and training efforts that will go into attracting labor. It also wasn’t that big a surprise.

As we reported last week, Shell has been moving more publicly in recent months, even talking openly about the Monaca project (which Shell refers to as the Pennsylvania chemical project) in its earnings call. Wesex has begun site preparation for a 200,000 square foot warehouse for C. J. Betters Enterprises that will be leased to Shell for storage. Shell has also leased land from Betters in Aliquippa that will be used for parking and overflow from the plant construction.

The players in Monaca once the plant gets started – and construction is continuing to proceed, regardless of the 18-month timeline given to the press – are Bechtel as the main EPC entity, along with Babcock & Wilcox for the plant itself and McCarl’s.

Shell’s announcement wasn’t the only big news in Pittsburgh’s energy market yesterday. Westinghouse announced it had secured agreements (although not signed contracts yet) to build six nuclear power plants in India. Westinghouse has received other contracts for plants around the globe, a signal that fears about nuclear plants are abating. After a bid employment build ten years ago, followed by a right-sizing through layoffs and attrition, Westinghouse’s new contracts should spur new hiring. Having subleased one of its buildings to PPG and vacated at least two off campus buildings, Westinghouse will find its space pretty tight if many new hires occur. That could be a nice boost to the Cranberry office market, which is beginning to show signs of life again.

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