The company signed a land option agreement with Horsehead Corp. to evaluate a site near Monaca, Pa., about 30 miles from Pittsburgh.
Shell had also been considering Ohio and West Virginia for the site.
The company said it took into consideration access to liquids-rich natural gas resources, water, road and rail transportation infrastructure, power grids, economics and acreage to accommodate potential future expansions.
The company's next steps include an environmental analysis of the site, engineering design studies, an ethane supply assessment and continued evaluation of the economic viability of the project.
During an energy conference last week, Ohio Gov. John Kasich said wherever the proposed plant lands,manufacturers in his state would still benefit from increased ethylene supplies in the region.