West Virginia believes it can support a chemical industry even if plans to ship Appalachian ethane to Canada and the Gulf Coast come to fruition, an official told a Pittsburgh-area audience Wednesday.

Looking to boost manufacturing, West Virginia Gov. Earl Ray Tomblin created the Marcellus to Manufacturing Task Force in February and charged it with studying the feasibility of converting ethane to ethylene in the state (see NGI, Feb. 21). Having just delivered an interim report to Tomblin, the task force believes West Virginia is “strongly in the game,” Kurt Dettinger, general counsel to Tomblin and member of the task force, said at the Marcellus NGL & Shale Gas Infrastructure Summit.

The possibility of building an ethane cracker in West Virginia is predicated on increasing ethane supplies from wet shale gas and the current lack of an ethane market in the region, but any local project would have to compete against proposals to ship ethane to existing markets.

Dettinger said potential investors have four primary concerns: Is there enough local supply? Is there enough local infrastructure? Is there enough local storage? Is there a good site for investment? So far, Dettinger said, the outlook on each is promising.

Based on the capacity expectations of natural gas liquids (NGL) processing plants in southwestern Pennsylvania, West Virginia and sections of the Huron Shale in eastern Kentucky, the task force expects the wet gas region to produce about 270,000 b/d of ethane by the end of 2015. If both the Sunoco Mariner West and the Marcellus Ethane Pipeline System (MEPS) are brought online, that would send 140,000 b/d to outside markets, leaving 130,000 b/d in the region (see NGI, May 9).

“So we do have sufficient volumes remaining if those projects come online at the capacities that they’re talking about. We’ll have multiple cracker opportunities in West Virginia and in the region,” Dettinger said.

As processing facilities come online or announce expansions, the region is getting more liquids infrastructure, but the task force believes West Virginia still needs 271 miles of pipe to connect all of the fractionators to the two proposed sites for an ethane cracker (see NGI, July 18).

Based on that investment, the task force is estimating shipping rates between 2 and 3 cents/gallon to move ethane throughout the state, compared to between 12 cents/gal and 20 cents/gal to ship it to Canada or the Gulf Coast through proposed pipelines. “We think that that’s a cost-advantaged transportation structure that should be well suited for not only producers but also petrochemical companies,” Dettinger said.

The task force hired a consultant to consider the storage possibilities in the state. The firm is set to deliver a report in early September, but Dettinger said initial results suggest that West Virginia could use salt caverns, hard rock caverns and depleted gas fields for storage; one of the potential salt caverns is on the site of an existing chemical plant, and the Big Lime formation appears to be suitable for hard rock caverns.

Finally, the task force is considering two existing petrochemical sites in the state, one owned by Bayer Corp. and PPG Industries Inc. in New Martinsville, WV, and another owned by Bayer in Institute, WV. A big issue is whether West Virginia can act quickly enough to keep from being bypassed by a pipeline.

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