Potential Cracker Plant Site in WV Leased for Drilling

One of the possible locations for a new ethane cracker plant in West Virginia is a 1400-acre parcel of land owned by Bayer Corp. located on the border of Marshall and Wetzel counties. Ahead of an announcement on a cracker plant, Bayer has decided to move forward with leasing the New Martinsville plant for shale gas drilling to Gastar Exploration in a deal expected to net Bayer $30 million over 30 years.

"We want to be part of this community, and we are here to stay," said Gastar Vice President-Northeast Michael McCown. "We are fortunate to have a good relationship with Bayer. Certainly within the next year, we should be operating on the Bayer property."

Gastar is already drilling on 3,300 acres owned by PPG Industries, whose plant lies north of the Bayer plant between the Ohio River and W.Va. 2 in Marshall County. PPG expects to collect the $50 million from the drilling deal over the project’s lifetime, which officials believe will last about 30 years.

"We are working on that PPG property right now, and we will methodically move southward to get to the Bayer property," McCown said. "This deal with Bayer gives us a large block of acreage to work with in the years to come."

McCown mentioned that the Bayer acreage is of the "wet" variety, meaning the gas stream will contain ethane, propane, butane and pentane, in addition to the methane. With Caiman Energy, MarkWest Liberty and Dominion Transmission already processing – or planning to process – at facilities in Marshall and Wetzel counties, the infrastructure is in place to extract the natural gas liquids from the methane.

"We look forward to working with Gastar on this project and believe this agreement helps to strengthen the long-term viability of the New Martinsville Industrial Park," said Jeffrey Bolton, general plant manager at the Bayer site. The plant produces more than 400 million pounds of chemical products annually.*

Gastar believes drilling at the New Martinsville site may enhance Bayer’s chances of landing a cracker plant at the site because there will be a ready supply of ethane right at the facility location itself.

With horizontal drilling, we can extract the minerals with no disruption to the cracker on the surface," said McCown. "We are working with Bayer as much as we can on our end to get the cracker here."*

*The Intelligencer/Wheeling News-Register (Feb 15, 2012) – Bayer Lease To Fetch $30 Million