Another New Entrant in the Ethane Cracker Plant Sweepstakes

winnerA new entrant has entered the ethane cracker plant sweepstakes, this one claiming they can build a cracker plant for one-third of the cost of others. Earlier this week, Keith Pauley, president and chief executive officer of the Mid-Atlantic Technology, Research & Innovation Center (MATRIC) said that MATRIC has launched a subsidiary company, Aither Chemicals, to leverage “off patent” technology created by Union Carbide in the 1970s that will make building an ethane cracker plant much less expensive than competing technologies.

"It (Aither) is a company built around utilizing natural gas from the Marcellus shale," Pauley said. "It uses technology created by Union Carbide Corp. in the 1970s. That technology is largely off patent now. We’ve built a staff that was involved in that technology development. We’ve extended the patents, created new technology around it that is specific to the Marcellus shale."

"The advantage Aither’s process has is, it takes about a third of the capital to build a world-scale plant as the $1.5 billion it takes to build a world-scale steam cracker," Pauley said. "Aither’s cracker, on the same scale, costs about $500 million.

"Also, Aither’s technology is very targeted in its chemistry," he said. "It doesn’t create a lot of pollutants or waste. The third thing that’s important is, it creates about the same number of jobs as a steam cracker. So it’s not a tradeoff in terms of jobs.*

Pauley plans to build his cracker plant in the South Charleston, West Virginia area and has retained a Pittsburgh-based firm to help him secure the necessary funding.

Cracker plants process ethane, found in “wet gas” from Marcellus and Utica drilling, into ethylene, a raw material used to make plastics. An ethane cracker plant will mean between $1.5 and $2.0 billion in initial investment to build (or $500 million in the case of Aither Chemicals), and will mean thousands of new jobs. The jobs will come in building the plant, then operating it, and with the numerous associated companies that will spring up around the plant to use the ethylene it produces to manufacture plastics products.

West Virginia, Pennsylvania, and Ohio are all heavily courting Shell, who previously stated they would announce the site of a new cracker plant in the Marcellus region by the end of January. There is another unnamed party interested in building a large-scale cracker plant as well. In December, former WV state Supreme Court Justice Richard Neely and Ryan Cunningham, owner of Charleston-based Cunningham Energy formed a partnership to build an ethane cracker plant on a 1,500-acre plot near Montgomery, WV (see this MDN story).

The state(s) where a cracker plant is built are the big winners from investment and jobs, but there’s no doubt the company first to build a functioning plant will also reap huge rewards.

*Charleston Daily Mail (Jan 10, 2012) – S.C. start-up seeking funds for cracker