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Ohio Utica Shale

Small ethane cracker plant may be coming to West Virginia

By Bob Downing Published: February 16, 2013

From the Marcellus Drilling News:

A new polyethelene (PE) manufacturing plant complete with a “small” ethane cracker is coming to West Virginia, somewhere “south of Wheeling.” Appalachian Resins Inc. is the company that will build the new $500 million plant with a capacity to produce 500 million pounds of PE per year. They aim to take advantage of Marcellus and Utica Shale gas and its byproduct ethane which is so abundant throughout the region.

Construction on the new plant will begin later this year. Here are the details that we have so far:

 

James Cutler and his partners in Appalachian Resins Inc. don’t seem to mind the questions being thrown their way. The group has plans to open a plant with 500 million pounds of annual PE capacity — which could be used for high or linear low density PE — at an undisclosed location south of Wheeling, W.Va.

The plant would include 500 million pounds of annual ethylene feedstock capacity, all of which would be used internally to make PE. If all goes according to plan, construction on the plant, which would include its own ethane-based ethylene cracker, will begin by the end of 2013, and PE made there could be for sale by the end of 2015.

Details of the Appalachian Resins plan — including site location and information about project investors — should be released by the end of February, Cutler said in a recent phone interview.

The entire proposal is being made possible by newfound supplies of natural gas throughout the region, which includes both the Marcellus and Utica shale gas fields. The AR plant would be sourced from the Marcellus field. Natural gas can be refined to make ethane, which is then converted into ethylene monomer and then into PE.

“In the 1960s, the petrochemical industry was an extension of the refining industry, and the decision was made to build petrochemical plants on the Gulf Coast, because that’s where the feedstocks were,” said Cutler, who is CEO. “But now people don’t know what to do with all this natural gas — there’s no shortage of it.”

Cutler has more than 20 years of experience as a consultant with Petral Worldwide Inc., an oil and gas consulting firm based in Houston. Prior to joining Petral, Cutler held chemical-related positions with oil and gas firm Texaco Inc. and its predecessor, Getty Oil.

Appalachian Resins’ proposed plant won’t be disadvantaged against larger PE plants, and will offer logistical advantages, according to Cutler.

“There aren’t a lot of economies of scale with ethane, so, if you look at the yields, it doesn’t matter if you build a big plant or a small plant,” Cutler said. “When you crack ethane, you get 80 percent ethylene.

“When you crack propane you get only 30 percent ethylene, and when you crack heavier feeds [from crude oil] you get more co-products, so you need more hardware to handle it and you need bigger furnaces.

“With heavier feeds, you’re building a refinery for all practical purposes,” he added. “With ethane, essentially the only product you make is ethylene.”

Shell Chemical Co.’s pending decision on a proposed petrochemicals plant in Monaca, Pa. — near Pittsburgh and not far from Wheeling — won’t affect Appalachian Resins’ plans. Shell has an option to buy land there, but recently was given a six-month extension on that option.

“We’re not really that concerned with what they do,” Cutler said of the Shell project. “Our raw material needs will be less than what [Shell] has proposed.”*

We’ve heard companies boast of wanting to build an ethane cracker plant in WV before, so we’ll keep a healthy skepticism and say we’ll believe it when we see it. However, this one seems much closer to reality than previous claims.

Click the link below to finish reading this very important story.

*Plastics News (Feb 8, 2013) – New West Virginia polyethylene plant would target shale gas

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