Shell Oil Co. said today Monday June 6, 2011 it plans to build an ethylene "cracker" plant somewhere in the Appalachian region, to process natural gas from the Marcellus shale region into a substance that is used to make petrochemicals.

The cracker would turn ethane from the natural gas into ethylene. The Houston-based company said it's evaluating options for ethylene derivatives to make at the plant, and the leading one is Polyethylene, or PE" used in packaging, adhesives, automotive components and other products.

Shell's announcement said a site will be determined later. "Building an ethane-fed cracker in Appalachia would unlock significant gas production in the Marcellus region by providing a local outlet for the ethane," Ben Van Beurden, the company's executive vice president for chemicals, said.

Dennis Yablonsky, CEO of the Allegheny Conference on Community Development, said last month that the economic development organization had approached five chemical makers about building cracking plants in Western Pennsylvania or northern West Virginia.

Such a plant typically costs $1 billion, and employs about 250 people, Yablonsky said. Consol Energy Inc. CEO J. Brett Harvey also said at that company's annual shareholders' meeting last month that more chemical companies likely will take an interest in the region because of its gas reserves