Who Wants to Crack Ethane in WV, PA, and/or OH, and When?

by Duane Nichols on March 13, 2012

Recent news from the Pittsburgh Tribune-Review provides a significant update to the Ethane Cracker situation:

Shell, which has announced plans to build in Pennsylvania, Ohio or West Virginia, is still “quite a few years away from a potential final investment decision,” Chief Executive Officer Peter Voser said last week at CERAWeek, a Houston conference held by energy research and consulting firm IHS. That timetable isn’t surprising because of the project’s cost and complexity, experts said.

Five companies have announced plans to build chemical plants that help convert ethane to plastic, according to business and trade news reports. Most are destined for the Gulf Coast. A West Virginia businessman has publicly stated interest in building one there, according to news outlets in West Virginia. [Reference is to a former WV Supreme Court Justice, Richard Neely; but we have heard no news from him recently.]

Cheap natural gas and ethane from shale drilling have fueled the growing interest and can support five new U.S. plants, Mark Lashier, an executive vice president at Chevron Phillips, said at CERAWeek, according to Bloomberg News. Each will cost $5 billion to $6 billion and take more than a decade to build, he said. Chevron Phillips is a chemical producer jointly owned by Chevron Corp. and ConocoPhillips.

Three of the companies, including Shell, have targeted the Appalachian basin. Despite the industry hub on the Gulf Coast, gas from the Marcellus and Utica shales costs so little to produce and is so rich in ethane and similar chemicals that it makes sense to build at least one cracker here, said Kent Moors, Scholar in Residence at Duquesne University’s Institute for Energy and the Environment.

Moors said Shell has invested so much — not just in drilling, but in pipelines and other projects — that, to maximize its investment and control its revenues, it makes sense to invest in processing, too. If Shell doesn’t build a cracker plant, it probably would have to end up selling its shale gas land holdings, he said.

 ”It’s a large investment, but let’s face it, if they don’t do it, they’re out of business. So they’ve got to build it somewhere,” Moors said. “It makes sense for them to build it closer to the location of the actual raw material. … I’d be shocked if we don’t end up with one here.”


{ 4 comments… read them below or add one }

Duane Nichols March 13, 2012 at 4:28 pm

See also the post on this blog for Februaru 1, 2012, which is a “Special Report on Possible Ethane Cracker Plants in WV, PA, & OH.”



Duane Nichols March 13, 2012 at 11:13 pm

CHEMICAL INDUSTRY ANALYSTS can see a potential glut of petrochemical feedstocks relative to demand growth in the years ahead. See the following presentation entitled “US Shale Gas Boom May Lead to a Petrochemical Excess” . . .



RD Blakeslee March 14, 2012 at 8:00 am

We’re seeing the other side of what the bloggers often call “corporate greed” – abundant supply and lower prices. Why is that a bad thing?


Duane Nichols March 15, 2012 at 4:59 pm

ETHANE CRACKER ANNOUNCEMENT— SHELL CHEMICAL announced today the choice of Monaca, Pa, on the Ohio River in Beaver County as their choice for a new petrochemical complex known as an ethane cracker facility. See the official announcement here. . . .



Leave a Comment

Previous post:

Next post: