Thailand´s PTT Global Chemical announcement of new application for permit revives Ohio cracker project
PTT Global Chemical, one of Thailand´s biggest petrochemical producers, announced in late February it will draft a new air permit request to present to Ohio authorities for a world scale polyethylene project aligned with the company´s recently announced new net-zero goals.
Thailand-based PTTGC´s late February announcement followed several months without information on a project to build an ethane cracker and a 1.6-million-tonnes polyethylene plant in Belmont County, Ohio. It was originally announced in 2015 but in recent years lost steam after missing a final investment decision.
The project received significant incentives in Ohio in past years because of the huge economic impact that construction would bring, with several hundred positions remaining permanently for decades. But it has also seen opposition from residents and environment groups.
A similar project by Shell, upstream the Ohio River, in Pennsylvania, to be completed later this year, has involved anywhere from $6 billion to $10 billion in investment, according to sources estimates.
Worker availability for specialized petrochemical cracker construction and related pipeline construction within the Northeast will be plentiful later in 2022 as Virginia-based Bechtel wraps up that Pennsylvania construction, where nearly 10,000 workers took part.
As for market conditions for polyethylene, a top executive recently said any new plant in the U.S. would find markets.
In late 2019 many industry executives in the region anticipated a final investment decision for the project in 2020.
But the project instead took a hit in July 2020 during the pandemic when a key partner pulled out, leaving PTTGC alone.
South Korea-based Daelim “has taken the difficult but necessary decision to withdraw as equity partner in the project,” Daelim and PTTGCA said in a joint statement on July 14, 2020. Daelim had joined the project two years before.
The company also postponed a final investment decision in 2020 into 2021 but had not provided any significant update until this late February 2022 announcement of a new draft application.
Not only PTTGC had reconsidered options during the Covid lockdowns. Experts at the time said most projects in early stages were likely put on hold worldwide amid high Covid-related uncertainty while those already underway continued slowly due to pandemic restrictions.
PTTGC “is in the process of drafting an application for an air permit from the Ohio Environmental Protection Agency (EPA) in accordance with its parent company’s Net Zero commitment,” the company said in late February.
The Ohio EPA Environmental Protection Agency had approved the air permit for the project in December of 2018 with a June 22, 2021 expiration date. It was then extended to a Feb. 24, 2022 expiration date.
“The forthcoming resubmission of its permit application will be consistent with the ambitious environmental protection goal announced last year,” PTTGC said.
The new permit may help abate local opposition including from groups like “the Concerned Ohio River Residents.”
The PTTGC America ethane cracker and related plants “could threaten our health, safety and environment,” according to group´s website.
The plant could bring volatile organic compounds that cause “severe health problems like cancer, asthma, COPD and neurological issues,” it added.
The Sierra Club, Earthworks, Center for Biological Diversity, and Freshwater Accountability Project had objected to the air permit issued for the project in 2018.
In Sep. 2019 PTTGC was able to convince some groups to stop their appeal plans against the air permit with promises to exceed state requirements.
The Sierra Club at the time said it wouldn´t appeal the permit as agreed, but would continue to oppose the project.
The Thai company led by CEO Kongkrapan Intarajang announced in October that the company will cut greenhouse gas emissions by 20% by 2030 and achieve net-zero emissions by 2050.
The company said in October it is “seeking to build new production bases overseas to gain competitive advantages and further market growth.”
The Ohio plant will feed on cheap ethane from the Marcellus and Utica shale formations.
“PTTGCA has invested more than $300 million in the Ohio project, and has prioritized identifying potential partners in order to move the project forward,” according to the company.
Additional investment would be needed in the region´s pipelines and storage, as well as in a further downstream industry like shaping the resin into final plastic products.
“The support and patience of the Ohio River Valley has been crucial to the progress PTTGCA has made toward making the proposed petrochemical complex a reality,” it added.
Labor, capital, demand aligned
Bechtel was the main contractor for construction of the Shell facility and has also been involved in the Ohio project.
In Sep. 2015 a consortium of Bechtel, JGC America and Samsung was selected to perform its front-end engineering and design for PTTGCA.
Asked about labor availability in early 2020, industry sources had said that Bechtel could move the trained workforce downstream the Ohio River from Monaca, Pennsylvania to Belmont County, Ohio if the projects were done sequentially without overlap.
The project fits into GC´s new investment strategy to reduce “assets in non-petrochemicals and re-focusing on high value petrochemical businesses,” disclosed in October.
A Northeast location allows not only access to cheap ethane but also proximity to markets for final plastic products. Most resin produced in the U.S. Gulf Coast is currently railed north or shipped abroad.
The company saw in 2021 a 43% sales revenue increase from the previous year. In December it bought European coating resins maker Allnex for $4.8 billion.
Dow´s CEO James Fitterling recently said there is projected world demand to justify projects. For every percentage point of gross domestic product growth in the world´s economy, “you need two to three world-scale polyethylene plants to come online,” he said.
Thailand is one of a dozen countries in the world with export-oriented resin production. Besides PTTGC, other companies from the Southeast Asian country are Integrated Refining and Petrochemical Complex, and SCG Chemicals.
By Renzo Pipoli