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Aither, Brazil's Braskem Fuel West Virginia Cracker Rumors

Days after a Royal Dutch Shell plc subsidiary announced that it intends to purchase a site in Pennsylvania -- presumably for its "world-scale" ethane cracker in the Marcellus Shale -- media reports are fueling speculation that two companies are interested in building their own crackers in West Virginia, with one possibly making their announcement today, Wednesday.

On Friday, the Charleston Gazette reported that Aither Chemicals LLC would announce plans to build a $300 million cracker and employ up to 200 workers at an industrial park in Institute, WV, by 2015, citing unnamed state and economic development officials. The article identified Bayer CropScience and MarkWest Energy Partners LP as partners in the project.

"We are planning to have some kind of announcement Wednesday," the newspaper quoted Aither CEO Len Dolhert on Friday. "Things are in the works. There are moving components, and we need to get those things arranged."

But on Tuesday, Aither spokesman Jason Keeling declined to comment on the matter.

"We do not have any additional comment," Keeling told NGI's Shale Daily. When pressed if news reports of an impending announcement were false, he added, "I'm not confirming nor denying, but I'm suggesting that writing that there will be an update tomorrow [would be incorrect]. We do not have any further updates at this time."

Aither announced in January that Renewable Manufacturing Gateway (RMG) had agreed to collaborate on a $750 million cracker, to be built in either Ohio, Pennsylvania or West Virginia (see Shale Daily, Jan. 19). That announcement said such a facility would employ 200 people and be operational by 2016.

Shell Chemical LP announced Thursday that it had signed an option to purchase a parcel in Beaver County, outside of Monaca, PA, for developing a petrochemical complex (see Shale Daily, March 16).

Two days after publishing its report on Aither, the Gazette said officials in Gov. Earl Ray Tomblin's administration privately told reporters that Brazil's Braskem --the largest petrochemical company in the Americas in terms of production capacity -- was a "more interested corporate player" in siting a cracker in the state.

Not true, state Commerce Secretary Keith Burdette said.

"I was in the meeting with the reporters, and the governor did not mention any company," Burdette told NGI's Shale Daily on Tuesday. "He just simply acknowledged that there were other companies that we were talking with.

"I have read reports speculating that it's Braskem, but we'll have no official comment. We have a signed confidentiality agreement with this [unnamed] company and we will not disclose their name."

Burdette also took the Gazette's reporting of the developments surrounding Aither's plans to task. "I am privy to the discussions," he said. "The story that appeared in the Charleston paper is premature. The discussions are ongoing. We're optimistic that there ultimately is a plan, but I think they were premature. They're not quite there yet."

Kimberly Osborne, Tomblin's press secretary, dismissed the Braskem news but, in a twist, made mention of the newspaper's story about Aither. She did not comment either way about the accuracy of the Gazette report.

"All along the governor has said that Shell wasn't the only game in town," Osborne told NGI's Shale Daily on Tuesday. "To my knowledge, we have not identified any other potential [companies]."

Industry experts told attendees of the Hart Energy Marcellus Midstream Conference and Exhibition in Pittsburgh on Tuesday that 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 and which do not (see related story).

Press reports last year quoted Braskem's CEO as saying the Sao Paulo-based company was considering a greenfield investment in a cracker and polyethylene plant in the United States.

According to its website, Braskem America has headquarters in Philadelphia and has operations in three states -- Pennsylvania, Texas and West Virginia. The company has a technology and innovation center in Pittsburgh, and manufactures polypropylene from facilities in Marcus Hook, PA, Kenova, WV, and La Porte, Freeport and Seadrift, TX.

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