Special Report on Possible Ethane Cracker Plants in WV, PA and OH

by Duane Nichols on February 1, 2012



The Governors of WV, PA and OH are all dreaming and scheming for the siting of a major new chemical industry in their State.   The reports below are all drawn from Internet web-sites that relate to this main theme.  What we discover here is the extent to which ethane cracking planning is active in the chemical industry worldwide, that crackers are in the planning stage for Texas and/or Louisiana and a few foreign countries around the world.  Whether a cracker plant will be built here in northern Appalachia is yet to be determined.  Shell Chemical (Royal Dutch Shell) promised to announce a cracker in 2011, then in January of 2012.  Now that has come and past, so we wait to see.  In this case, no news is not good news for the Governor(s).

WV Odds of Winning a Cracker Plant Not Clear (Reference)

Shell Chemicals officials recently stated they would be announcing where they would be considering placement of an ethane cracker chemical plant. Such a facility would utilize the ethane from “wet” natural gas to produce ethylene.  The ethylene would then be reacted to form other chemicals, perhaps polyethylene or other chemical substances in large quantities.  This offers hope to revitalize West Virginia’s chemical industry.

Dan Carlson, general manager of business development for Shell Chemicals recently outlined numerous factors in which West Virginia will need to outshine Pennsylvania and Ohio in order to have a cracker facility located in the state. Some of the factors being considered include the regulatory environment, access to ethane-rich gas fields, transportation infrastructure, power grid infrastructure, underground storage facilities, availability, skills and cost of local workforce, proximity to Northeast markets, and the cost and ease of doing business in the respective states.

Carlson said: “We hope to reach a decision on the location of the cracker by the end of this year and plan on announcing it in January.”  [So here we are in February and all we know is that a cracker is feasible; but, the incredibly high cost of the investment is a clear obstacle for any company. DGN]

So-called “wet” natural gas contains up to about 15% ethane; and, such Marcellus natural gas is  located primarily in the region north of Route 33 and west of I-79. Chesapeake recently announced plans to ship at least 75,000 barrels of ethane daily from the Appalachian region to Texas for use by the petrochemical industry on the Gulf Coast. Other companies, including Range Resources and MarkWest, have also made plans for ethane delivery to Louisiana, Texas or Canada. Ethane production estimates from the West Virginia Marcellus shale are as high as 270,000 barrels per day. A cracker facility would utilize up to 65,000 or 85,000 barrels per day, typically.


CEO: Aither Chemical Wants Multiple Plants in Region (Reference)

Aither Chemicals of South Charleston, WV,  would like to build multiple ethane-processing plants in WV and PA. But, finding funding and a site for the first one is the immediate challenge for its initial ethane catalytic cracker plant. Aither and its Pittsburgh-based partner, Renewable Manufacturing Gateway, a nonprofit clean energy job-creation group, have identified several suitable commercial plant locations in western Pennsylvania, eastern Ohio and northern West Virginia, including one in Beaver County. PA. The former steel mill site along the Ohio River also reportedly is under consideration by Royal Dutch Shell for an ethane steam cracker plant.

This company’s process, using variations on methods developed by Union Carbide Corporation decades ago but never used in commercial operation, is cheaper and cleaner than the steam cracker system. According to Aither’s CEO, it consumes 80 percent less energy and produces 60 percent less carbon dioxide output.

 “Aither wants to lead the renaissance of petrochemicals in the region,” he said, noting that this could be the biggest growth in an industry since steel was king in the area.


Chevron Phillips Chemical Plans Texas Ethane Cracker for 2017 (Reference)

The company will build a world-scale cracker at its existing Cedar Bayou complex as well as two nearby polyethylene units.

Chevron has executed agreements with The Shaw Group to design the 1.5 million tpy (3.3 billion pounds/year) ethane cracker utilizing proprietary Shaw technology. Chevron Phillips Chemical’s proprietary technologies would also be utilized to build two new polyethylene facilities, each with an annual capacity of 500,000 metric tons (1.1 billion pounds), the company said.

The new polyethylene units would be located either at the Cedar Bayou facility or a site nearby the Chevron Phillips Chemical Sweeny facility in Old Ocean, Texas. A final site selection decision for these units is anticipated during the first quarter of 2012 with final approvals in 2013 and estimated completion in 2017.


APLA: Brazil‘s First Major Petrochemical Company Makes its Mark (Reference)

Brazil’s leading petrochemical company is making an impact on the global stage. Brazilian polymers major Braskem is delivering on its promise to expand into new territories. The company is implementing projects in Mexico and Venezuela, and also has production plants in the US and Germany following the acquisition of US-based Sunoco’s  polypropylene (PP) business in 2010 and US-based  Dow Chemical’s PP business in 2011.

With the purchase of the Dow PP business, Braskem says it has become the leading PP producer in the US, the world’s largest PP consuming country, with 1.425m tonnes/year of capacity. The acquisition, concluded in September, gives Braskem two plants in the US (Freeport and Seadrift, both in Texas) and two in Germany (Wesseling and ­Schkopau). The Sunoco PP acquisition gave Braskem its “initial beachhead” in the US, says Luiz de Mendonca, executive vice president for the company’s international business. “With the Dow acquisition, we are able to expand that presence.”

Further investments in the US could involve expanding into new product areas beyond PP, he suggests. Braskem, like most petrochemicals producers with operations in North America, is monitoring opportunities to invest in new ethylene capacity to take advantage of the rich ethane reserves in the Marcellus Shale natural gas deposit, which is largely concentrated in Pennsylvania.


Sasol Plans $3.5 to $4.5 Billion Ethane Cracker, Ethylene Project in Lake Charles, LA (Rererence)

Sasol Ltd. of South Africa is planning to add a multibillion ethane cracker and ethylene-derivative project to its Lake Charles facility in Louisiana, in part to leverage on the rapid development of shale gas in North America.

The project, estimated at a cost of $3.5 billion to $4.5 billion, could produce between 1 million and 1.4 million tons per year of ethylene. Sasol’s board of directors has approved the advancement of the project into a feasibility study, which is slated to complete in the second half of the company’s fiscal 2013. Companies reportedly looking to build new crackers include Chevron Philips Chemical Co., Royal Dutch Shell Plc., Formosa Plastics Corp. and Braskem.

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