A day after an Asian partnership said it has selected an undisclosed location in Belmont County, OH, for a multi-billion-dollar ethane cracker, it was confirmed that a pair of South American companies would put on hold plans for a similar project in West Virginia.
Brazilian construction firm Odebrecht SA and its petrochemical affiliate Braskem SA said plans for an ethane cracker in Wood County, WV, would be postponed pending further project analysis amid the commodities price downturn.
West Virginia Gov. Earl Ray Tomblin announced the project, called the Appalachian Shale Cracker Enterprise (ASCENT), in November 2013 (see Shale Daily, Nov. 14, 2013). Plans called for an ethane cracker, three polyethylene plants and water treatment and energy cogeneration infrastructure in Wood County. The facility would convert locally sourced Marcellus and Utica shale ethane into ethylene and polyethylene, which are key building blocks for plastics.
Tomblin spokesman Chris Stadelman told NGI's Shale Daily on Thursday that the governor and state Department of Commerce Secretary Keith Burdette had met with company representatives earlier in the week. Stadelman said the officials told Tomblin that they remain committed to working with the state throughout the planned delays.
"Throughout the planning for project ASCENT, Odebrecht has been thoughtful and strategic," Stadelman added. "With an investment of this magnitude, and the changes in the worldwide energy markets, reevaluating the best configuration for the project is understandable and consistent with the company's overall approach."
As oil prices have fallen by some 50% since last summer, so too have the prices for natural gas liquids, prompting exploration and production companies in the Appalachian Basin and across the country to cut capital expenditures. Similarly, backers of infrastructure projects have been reconsidering such investments.
But Thailand state-owned petrochemical and refining company PTT Global Chemical (PTTGC) pcl has partnered with Japan’s Marubeni Corp. to develop a multi-billion ethane cracker in Ohio, the state’s economic development organization JobsOhio said Wednesday. The partnership has been working for nearly two years to identify a site for the facility in the Appalachian Basin. Like other companies pursuing crackers in the region, however, PTTGC officials said no final investment decision is expected until 2016.
For the next year or longer, the companies plan to work to complete the facility's engineering design and secure federal and state permits. Belmont County is at the center of Utica Shale development and is one of the top natural gas-producing counties (see Shale Daily, Feb. 26; July 8, 2014; Nov. 19, 2013).
Odebrecht and Braskem officials, meanwhile, confirmed recent comments made by the CEO of Braskem America at a chemistry industry meeting in New York, where he explained that given the dip in commodity prices, ASCENT could be delayed until after 2020.
The crackers would convert locally sourced ethane from the Marcellus and Utica shales into ethylene and polyethylene, which are key building blocks for plastics.
PTTGC also provided no estimate for how much its facility would cost to construct or how much capacity it would have. Other multi-billion-dollar crackers announced in the Appalachian Basin, including ASCENT, are being designed with upwards of 60,000 b/d of ethane capacity.
Odebrecht had already applied for air and evaluation permits with the state, according to the West Virginia Department of Environmental Protection (see Shale Daily, May 19, 2014). The company has also purchased land near Washington, WV, just outside Parkersburg -- about 75 miles north of the state capital, Charleston.