Exclusive: Shell’s VP Pennsylvania Chemicals Hilary Mercer talks PE and construction
Construction at Shell’s world scale $6 billion petrochemical complex near Pittsburgh, Pennsylvania has begun, and as the first major U.S. project of its type to be built outside the Gulf Coast in 20 years, Shell is paving the way for a major Appalachia chemical region, industry analysts told Petrochemical Update.
When built, the facility will include an ethane cracker with an approximate annual average capacity of 3.3 billion pounds of ethylene; three polyethylene (PE) units with a combined annual production capacity of approximately 3.5 billion pounds; and power and steam generation, storage, logistics, cooling water and water treatment, emergency flare, buildings and warehouses.
Commercial production is expected to begin early in the next decade.
In an exclusive interview with Petrochemical Update, Hilary Mercer, VP Shell Pennsylvania Chemicals, shares her personal insights and reflections on her role in building Shell’s new PE business.
From game-changer to crisis manager through a variety of primarily Integrated Gas (LNG) projects and geographies across Shell, Hilary Mercer’s 30-year career trajectory has landed her as the recently named VP, Pennsylvania Chemicals. She joins this adventure from her project leadership role at Samsung Heavy Industries (SHI) shipyard in Geoje, South Korea, contributing to readying Prelude, the world’s first floating LNG facility, for it sail away to gas fields off the coast of Western Australia.
First in Appalachia
Mercer radiates excitement and pride as she describes building the legacy she now leads with her General Manager of PE Marketing, the Asset Manager and the Project Director. As the Business Opportunity Manager (BOM) for the new asset, she describes so many “firsts:” Shell as a new entrant to the PE market, having exited it decades ago; the facility, a first of its kind in the Appalachian region.
As BOM, she describes her role as forging alignment between the PE Marketing, the Project Director and Asset Manager and their respective organizations to optimize the long-term life cycle costs of the asset and to ensure that Operations and Maintenance have all the data they require to be agile and innovative in meeting customer needs.
With her background strongly rooted in capital project effectiveness, Mercer is rapidly climbing the learning curve of what it takes to penetrate an existing, growing commodity product market, both domestically and globally.
“For me, this is a once-in-a-career chance to write the script on blank paper for Shell’s imprint on a region and a new business,” Mercer told PCU. “It’s all about the creation: of jobs; of product; of a customer base; of being a welcome neighbor in the community”, says Mercer. “Adaptive leadership is required to meet the business goal of sustainable, quality production.”
After exploring JV options for a product partner, Shell elected to forge its own way, recognizing the logistic advantage of shorter and more dependable PE supply chains, compared to supply from the Gulf Coast.
More than 70% of North American polyethylene customers are within a 700-mile radius of Pittsburgh. According to IHS Markit, the U.S. can satisfy domestic demand with a good margin with export capacity to spare to competitively serve European markets via East Coast ports in proximity of the Appalachian region.
Main Works Construction
Mercer joins the initiative at a crucial junction – the start of Main Works construction for a petrochemical complex that includes processing facilities for 1000 kta of high-density polyethylene and 550 kta of linear low-density polyethylene; as well as infrastructure comprised of a cogeneration unit, water treatment plant, water detention pond, dock, rail, and truck loading. She is witnessing the massive build-up of a construction workforce that will peak at 6,000. “The landscape is rapidly changing,” she remarks.
Image: Alexander Morozov
When asked her first impressions of the project itself, she told PCU she was impressed by the condition of the site, specifically the closure of essentially all underground work. She is also encouraged by the competency and continuity of both Shell and EP contractor leads who followed the project from EP offices to the site. She remarks “this is a first for Shell – 100% of the detail engineering is complete before the first concrete pour.”
Given that Bechtel served not only as the EP contractor for the Utilities and Infrastructure (non-process, or OSBL) portion of the plant, but also as the EP Integrator for the entire facility, and is now the single Construction Manager for the project, she has high expectations of a seamless transfer of data from design to construction.
In most projects, OSBL facilities (steam, power, water, instrument air) that are dependent on final data requirements from processing units, are the last to be designed -- and first systems required for start-up. Mercer sees a unique advantage to ready these OSBL systems as required for commissioning.
In support of Anca Rusu, Project Director, she continually reinforces the message that there is no scenario in which Bechtel loses and Shell wins. “A Bechtel success = a Shell success.” As with any uber-project, there are tensions to be navigated as the project undergoes multiple, changing critical paths, many of which are tied to major equipment and/or module delivery dates. In her experience, Mercer says that in the end the critical path is almost always completion of piping.
The last perspective she shared with PCU in this interview is the overwhelming support of the community and region as they welcome the influx of economic growth. Shell is building a 50-year asset with 600 permanent jobs.
Academia and industry have partnered across state borders to provide workforce development options. As it should, the region has its eye on a goal larger than a sustainable workforce for Shell. Never has she seen such strong support from external stakeholders.
Petrochemical Update will check in with Hilary Mercer in the coming years as the skyline of Shell site at Monaca, Pennsylvania changes, and as the first railcars and fleet of trucks filled pellets make their way to customers.
Petrochemical Update has a free 33-page whitepaper on the US North East Petrochemical Industry Market Outlook 2018 available for download.
By Martina Asbury