Northeast petchem development gets a boost with PTTGC announcement
Northeast petrochemical development got another step closer to reality when EPC giant Bechtel announced that Thailand's PTT Global Chemical has awarded it a contract to build an ethane cracker in Belmont County, Ohio, in the heart of the Utica Shale.
Bechtel, along with its partner Samsung, has won the engineering, procurement and construction (EPC) contract for a multi-billion-dollar petrochemical complex in western Ohio, a Bechtel executive said.
Paul Marsden, senior vice president at Bechtel, announced the partnership with Thailand’s PTT Global Chemical (PTTGC) while speaking at the Northeast US Petrochemical Conference and Expo 2019 in Pittsburgh.
The petrochemical project, estimated at $7bn-$10bn, comprises a world-scale ethane cracker with capacity of 1.5m tonnes/year of ethylene, plus 1.6m tonnes/year in various polyethylene units, including high density polyethylene and linear low density PE (HDPE and LLDPE ) and metallocene LLDPE (mLLDPE).
A final investment decision (FID) has not yet been made on the project. But selecting the EPC is a major step toward that decision.
PTT has been in the initial stages of development on this project for years and is now partnering with South Korea-based Daelin. There is no timeline for the project yet.
PTT Global's US subsidiary, PTTGC America, is using the site of a closed FirstEnergy coal-fired power plant in Mead Township of Belmont County as the future cracker's site. The company has already allocated $100 million on surveys and permits.
The Northeast U.S. region has drawn development attention in recent years because of newfound supplies of shale oil and gas in the region, primarily from the Marcellus and Utica shale fields.
Shell Chemical is building a major plastics and petrochemicals complex near Pittsburgh, and other projects are being discussed for the region.
Shell’s project will upgrade locally-produced ethane from Marcellus and Utica shale formations gas production.
When complete, the Shell project will include an ethane cracker with an approximate annual average capacity of 3.3 billion pounds of ethylene; three polyethylene units with a combined annual production capacity of approximately 3.5 billion pounds; and power and steam generation, storage, logistics, cooling water and water treatment, emergency flare, buildings and warehouses.
The Northeast petrochemical development areas consists of an area known as the “Shale Crescent” region of Ohio, Pennsylvania and West Virginia along the Ohio River.
The Marcellus and Utica Shale plays, which underlay the Shale Crescent region, are two of the most prolific shale plays in the world.
The Marcellus and Utica shales can support up to four more crackers, besides PTT's and Shell's, according to the U.S. Department of Energy.
IHS Markit forecasts that the region will supply 45% of U.S natural gas production by 2040, up from 29% in 2018. As a byproduct of abundant shale gas, the Shale Crescent region is rich in natural gas liquids (NGLs) used in petrochemical production and plastics manufacturing, including ethane, propane and butane. IHS Markit forecasts the region will supply 19% of United States NGL production in 2040, up from 14% in 2018.
Marsden is also the project director for Bechtel on the Shell petrochemical complex being built in Monaca, Pennsylvania, outside Pittsburgh.
There is no timeline for the PTTGC project yet. However, the timing of this project alongside Shell could work well for labor, as having sequential projects lined up could encourage welders and other key workers to relocate to the region instead of simply coming in for one project at a time, Marsden said.
At least 6,000 craft labor will be needed at peak construction to build the Shell plant and probably a similar number for the PTT plant. The projects timing could allow for more continuous work in the northeast.
A welder, for instance, could work for between three and five years on the two projects instead of one to three for just one.
PTTGC plans to build, in addition to the cracker, two 350,000 tonne/year HDPE units, 500,000 tonnes/year of monoethylene glycol (MEG) capacity and 100,000 tonnes/year of ethylene oxide (EO) capacity at the Ohio site, which is near Wheeling, West Virginia, according to ICIS.
Second petrochemicals hub
While the Gulf Coast has long served as the primary energy and petrochemical hub in the U.S., the Shale Crescent region’s abundant natural gas and NGL supply – combined with its access to water for transportation and processing, as well as its proximity to the vast majority of North American demand for thermoplastics –make it a prime candidate for a second U.S. petrochemical hub.
“Research continues to drive home the myriad economic advantages for manufacturers in the Shale Crescent region when compared to other, more traditionally accepted energy and chemical hubs,” said Wally Kandel, spokesperson for the economic development initiative Shale Crescent USA.
“Investors are catching on that the Marcellus and Utica Shale formations offer unprecedented benefits; there are few other places in the world, if any, where the supply, manufacturing facilities and end users are all in close proximity.”
Image: Shale Crescent USA
With access to 50% of the U.S. population within a day's drive, the Shale Crescent USA is strategically located for the next petrochemical hub of the U.S.
More than 80% of North American energy executives believe that locational diversification is needed in the U.S. petrochemical market, according to a conference survey.
The biggest attraction to operating in the Northeast is proximity to customers (35%), proximity to feedstock (32%) and cheap feedstock (21%), according to the poll.
Producers believe the biggest hurdles to the Northeast becoming another petrochemical hub are the lack of pipelines (27%), construction cost (19%), harsh permitting (13%), and lack of gas storage (11%).
“The biggest hurdle is it takes a long time to change thought processes. For 75 years, the right answer was if I am going to build petrochemicals, I am going to build on the Gulf Coast,” Wally Kandel, Senior Vice President and Site Manager for Solvay said. “Getting that mindset change and raising the awareness of the opportunity in Shale Crescent is what we need to do.”
By Heather Doyle