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Fourth Company Considering West Virginia for Ethane Cracker

July 23, 2012
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A fourth company is considering plans to build an ethane cracker in West Virginia, according to state Commerce Secretary Keith Burdette.

"The WVDO [West Virginia Development Office] is in discussions with multiple companies in various stages of their due diligence on the development of ethane crackers in our region," Burdette told NGI. "The WVDO has signed non-disclosure agreements with two other companies and has had discussions with a fourth."

Burdette confirmed that Aither Chemicals LLC was one of the four companies, but he added that a non-disclosure agreement with Aither prevented him and the WVDO from disclosing any specific details. "The Appalachian region in general and West Virginia specifically make sense for the value-added development of ethane, and we continue to work with companies who have similar interests," Burdette said.

Aither is reportedly interested in partnering with Bayer CropScience and MarkWest Energy Partners LP to build a $300 million cracker capable of employing up to 200 workers at an industrial park in Institute, WV, by 2015 (see NGI, March 26).

Meanwhile, Braskem America, whose Brazilian parent is the largest petrochemical company in the Americas in terms of production capacity, is also interested in building a cracker in the region.

Last March, Shell Chemical LP -- a subsidiary of Royal Dutch Shell plc -- signed an option to purchase a 300-acre site near Monaca, PA, for a petrochemical complex that presumably would include a "world-scale" cracker serving the Marcellus Shale region (see NGI, March 19). Shell has said such a facility would be capable of processing 60,000-80,000 b/d of ethane.

According to media reports, Burdette told the Rotary Club of Charleston that he has signed a third non-disclosure agreement with a company interested in building a cracker in the state, but he said Shell was not one of them. He also said Shell was originally looking for a 250-acre site, but then decided to secure 500 acres.

West Virginia Oil and Natural Gas Association Executive Director Corky DeMarco indicated that he was surprised by Burdette's comments about the 500-acre requirement.

"The companies that I have talked to personally never threw out 500 acres," DeMarco told NGI. "They were in the 200- to 300-acre range, but they pointed out that industrialization will happen around a cracker facility. They said, 'the larger the footprint, the better.'"

DeMarco added that 40 to 60 derivatives plants could ultimately decide to build "as close to a cracker as they possibly can. So even though [the cracker] may only take X number of acres, it is certainly good to have a larger available space with highway, rail and river access because of the plants that would locate around them."

Industry experts believe ethane production in the Marcellus could potentially support multiple ethane crackers, but ultimately economics would play a larger role in deciding which projects get built.

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