Officials continue working toward ethane cracker plant
By BRETT DUNLAP
PARKERSBURG – Work continues on getting the pieces in place that will allow a new petrochemical complex – the ethane cracker plant – to be built in Wood County, state and local officials said.
On Nov. 14, Gov. Earl Ray Tomblin and officials with Brazil-based Odebrecht announced plans for the development of an ethane cracker, three polyethylene plants and associated infrastructure for water treatment and energy co-generation. A cracker plant converts ethane, a byproduct from Marcellus Shale and Utica Shale natural gas, into the widely used ethylene, a key component for the plastics industry.
The proposed complex is called ASCENT, which stands for “Appalachian Shale Cracker Enterprise.” If the plant is built, it would be operated by Braskem America.
Appalachian Shale Cracker Enterprise LLC purchased the SABIC Innovative Plastics plant property at 9226 DuPont Road, Washington, W.Va., for $10,910,890. The sale was completed on Dec. 31 and filed recently with the Wood County Clerk’s office.
SABIC, which employs about 130 people, is set to close in 2015.
The petrochemical complex that includes the cracker plant is expected to generate thousands of construction jobs and hundreds of ongoing positions.
In Tomblin’s State of the State address on Jan. 8, the governor spoke about new legislation passed to provide a stable and predictable regulatory framework for oil and gas producers.
“This important bi-partisan legislation is recognized as a model for horizontal drilling in the region,” Tomblin said. “Our law led to new investments in drilling and infrastructure in West Virginia, spurring job growth and increasing the tax base for counties and schools.”
The resources of the state need to be used here and not piped somewhere else, he said, adding the West Virginia Legislature passed a bill to encourage Marcellus-to-Manufacturing investments to foster the development of a revitalized high tech chemical industry, with enduring high-paying jobs.
“We have created unprecedented opportunity for generations of West Virginians,” Tomblin said. “Project ASCENT, the cracker, is a defining moment for economic development in the Mountain State.
“Odebrecht believes Wood County is the best location for the potential development of an ethane cracker and three polyethylene plants. Wood County provides a unique opportunity to construct a cracker that maximizes our abundant Marcellus and Utica Shale reserves.”
The construction phase of this project alone is expected to create approximately 10,000 jobs.
“This cracker is a game changer for us,” Tomblin said.
ASCENT’s feasibility will depend on several important variables, including the contracting of long-term ethane supply, as well as financing, regulatory approvals and appropriate governmental support.
The proposed site for the ethane cracker plant is the SABIC plant, the old GE Plastics site, in Washington, W.Va. Officials with SABIC recently announced the plant would be closed in 2015.
The site at SABIC is more than 300 acres and Odebrecht will utilize what it can of the existing plant, such as some equipment and office buildings, officials said.
Cam Huffman, executive director of the Wood County Development Authority, said development officials are working with the state to identify issues that will need to be addressed.
“We are basically doing the same thing we have been doing for the last three years,” he said.
Huffman could not go into any more detail on immediate steps being taken in the near future as some of that information was privleged.
Wood County provided a unique opportunity to construct a cracker with potential to develop other related facilities and manufacturing operations with the natural gas industry, officials said.
West Virginia Commerce Secretary Keith Burdette had said there is a potential for thousands of construction jobs in the initial building phase, followed by many jobs in the operational phase of the facility as well as jobs created from downstream companies that could locate to the area to take advantage of the ethane cracker plant.
The governor credited the state’s low taxes, fiscally responsible government, quality of life and it location being a day’s drive from half the country’s population as reasons the Wood County site was selected.
Burdette said it will be several years to get to the operational phase for a cracker plant. However, company officials with Odebrecht have shown the commitment to making it a reality, he said.
Tax incentives which were put in place by the state Legislature a couple years ago in the hopes of enticing Shell to locate such a facility in West Virginia are still in place, Burdette had said. Although Shell eventually chose a site in Pennsylvania, the incentives are still in place for Odebrecht, he added.
According to Burdette, the challenge is overcoming infrastructure issues and how the state can assist the company. Officials talked about the need for pipelines to be able to move the natural gas and its related products around.
Natural gas is to the chemical industry as flour is to a bakery, Cal Dooley, President/CEO of the American Chemistry Council, said in a video clip played recently for the Area Roundtable.
“For the first time in 50 years, major chemical producers are looking at making multi-billion dollar investments in West Virginia to capitalize on the Marcellus Shale,” he said. “Around 96 percent of all consumer products have chemicals as a part of them.
“A significant number of those are derived from natural gas that has been cracked into various chemicals.”
Development of ethane cracker facilities are expected to create a renaissance in manufacturing in the United States, Dooley said. This could represent $7 billion to the West Virginia economy and the creation of 10,000-12,000 jobs.
Officials want to build a cluster of facilities in this part of the country to facilitate development of natural gas pulled from the Marcellus and Utica Shale deposits that would require states – like Ohio, West Virginia and Pennsylvania – to work together to develop a number of related businesses and opportunities to benefit the region as a whole.
Officials will begin to look at the infrastructure needs and how to best address them.
Burdette said it will take time for many aspects of the project to come together.
The investment in this facility is expected to reach into the billions of dollars.
Although there are many things that still need to happen, Burdette said he and Tomblin are confident the project will result in the ethane cracker plant being built in Wood County.