Daily GPI / Infrastructure / NGI The Weekly Gas Market Report / Infrastructure / NGI All News Access

Proposed Ohio Ethane Cracker Now to Rival Shell Project

Emboldened by a partnership with South Korea-based Daelim Industrial Co., PTT Global Chemical pcl (PTTGC) raised its stakes in Ohio on Monday, announcing that the size of its proposed ethane cracker in Belmont County would nearly double.

The announcement came just weeks after a subsidiary of PTTGC, the petrochemical affiliate of Thailand’s state-owned oil and gas company PTT pcl, said it would team up with Daelim to conduct a feasibility study and secure funding for the planned multi-billion dollar facility.

Production is now estimated at 1.5 million metric tons/year of ethylene, or at least 500,000 metric tons/year (mty) more than the company previously announced. That would put the facility in line to produce the same amount of ethylene as Royal Dutch Shell plc’s ethane cracker, which is under construction in western Pennsylvania. Shell’s facility is designed to have the capability to consume about 100,000 b/d of ethane.

Daelim Energy CEO Sean Kim, who joined Ohio Gov. John Kasich and other state officials to make the announcement Monday, said the partnership wants to build the Appalachian Basin’s “most competitive petrochemical plant.” He said the project enjoys many “strategic advantages,” including proximity to market and low-cost feedstock. While a final investment decision is not expected until later this year, Kim said, “we plan to build a very sustainable business here.”

In what JobsOhio President John Minor called another key step “toward the finish line,” PTTGC has also executed an option to buy the remainder of the nearly 500-acre site along the Ohio River where the cracker would be built. Last year, the company exercised its purchase option on a 167-acre site that was owned by FirstEnergy Corp., which formerly operated a coal-fired power plant there. In the last month, Minor said PTTGC bought the nearby 300-acre site owned by the Ohio-West Virginia Excavating Co. Minor said PTTGC has spent more than $150 million on engineering and design work. 

Daelim Industrial is the parent of Daelim Group, a conglomerate that oversees 12 affiliate companies that develop and construct petrochemical facilities, power plants, commercial properties, sports facilities and resorts, among other things. The petrochemical division operates 1.95 mty of ethylene production capacity.

The agreement to partner with PTTGC was signed in January.

“We wanted to tell you that we thought this was a pivotal step, and I am extremely hopeful, in fact, listening to the language, to what they had to say today,” Kasich said of the partnership and comments made by company representatives. “I am extremely hopeful, hopeful that within a relatively short period of time, we can come back to this room and make a final announcement.”

A labor representative at the event in Columbus, which was livestreamed online, said a “couple thousand” tradesman would be needed to construct the facility if it moves forward, but Shell’s Pennsylvania plant is expected to employ 6,000 workers at peak construction and another 600 once operational in the early 2020s. While PTTGC didn’t share estimates, state officials are optimistic that the company’s partnership with Daelim would mean better things for the regional economy.

“This partnership is important for a number of reasons,” Minor said. “One, this adds a second world-class company to this project...With the addition of Daelim, the production, the output from this plant will nearly double. That’s important because it means there’s going to be greater investment in this project, in this site; it’ll mean more jobs, and it’ll ultimately have a greater impact on the region as a whole.”

PTTGC has secured commercial arrangements with producers for feedstock as well as those for utility supplies, product marketing and logistics. The company has also completed a significant amount of site preparation.

Recent Articles by Jamison Cocklin

Comments powered by Disqus