Second Cracker Plant Project Moving Ahead Despite Permit Issue

Whether a second petrochemical plant in the Appalachian region becomes a reality depends on a final investment decision by the Thailand-based corporation that has been studying the project for several years.

While that has not yet happened, some pieces of the proposed project continue to fall into place, yet roadblocks remain, as seen from two recent announcements.

PTTGC has delayed its final decision on the project in Belmont County, Ohio, along the Ohio River until early next year due to the COVID-19 pandemic and related economic fallout. It also lost Daelim Chemical as an equity partner.

However, recently PTTGC reached an agreement with Range Resources to be an anchor supplier of ethane for the proposed cracker. Range will supply 15,000 barrels per day of ethane to the facility that will have the capacity of 100,000 barrels a day that will be used to create ethylene derivative products.

The $6 billion project, if undertaken, would be similar to the Shell cracker plant now being constructed in Beaver County. A cracker plant converts molecules of ethane, a natural gas byproduct, into ethylene and polyethylene, from which plastics, resins, solvents, and other industrial products are made.

“We are pleased to help support a world-class project that brings additional jobs to Appalachia, while utilizing our low-cost natural gas resources,” said Jeff Ventura, Range’s CEO and president, in a statement. “Range views this project as a win-win-win for Range, PTTGCA and the many communities in the Northeast that will benefit from the economic boost this facility provides. Importantly, for Range, ethane supplied to PTTGCA will be sourced from existing natural gas production and NGL processing facilities with the benefit of no additional transportation required. Range will also receive a significant revenue uplift compared to selling into the natural gas stream.”

PTTGC President and CEO Toasaporn Boonyapipat said “Range’s deep inventory of high-quality wells will provide our facility with a safe and reliable source of ethane in the years to come, and we look forward to additional partnerships with producers in the region to make this world-scale polyethylene complex a reality.”

But a potential roadblock also arose when Powhatan Salt Co., a company associated with the Mountaineer NGL storage project that will provide storage for PTTGC’s feedstock in underground salt caverns, asked the Ohio Department of Natural Resources to cancel three permits it had issued for drilling. The move came after environmental groups challenged the permits, arguing the proper administrative procedures had not been followed.

PTTGC had announced in July that it had reached an agreement for Mountaineer NGL Storage to provide its storage and transportation infrastructure. Powhatan said it plans to reapply for the permits.

The project could also face headwinds due to the present economics of the gas industry and concerns over climate change and greenhouse gas emissions, but the current administration remains a strong supporter of developing a petrochemical hub in Appalachia. If such a hub were to become a reality, the abundant gas from the Marcellus and Utica and its byproducts could be used closer to home and provide a revenue stream for producers.