Will West Virginia ever get its own ethane cracker plant? It will if Aither Chemicals, based in South Charleston, WV has any say in the matter. MDN has been following the Aither story for some time. Aither Chemicals, a spin-off/subsidiary of Mid-Atlantic Technology, Research & Innovation Center, was established to build and operate ethane cracker plants that use modern technology making the plants smaller and less expensive to build and operate than tradition cracker plants (see this MDN story for background).
Aither had a deal in principle with Bayer CropScience and MarkWest Energy to build one of these “new” kinds of cracker plants in the Charleston, WV area. That deal was set to be officially announced in mid-March (see this MDN story). But then the wheels came off the wagon and all was silent. No deal, no announcement. Until now.
Yesterday Aither announced they signed a memorandum of understanding (MOU) with Bayer CropScience to gage interest in whether or not there would be customers willing to buy the chemicals produced by an ethane cracker plant. It’s called an “open season” in the business—where companies make commitments to buy an ongoing supply of a commodity—in this case ethylene (used to make plastics), acetic acid, carbon dioxide, or carbon monoxide. (Wait! We thought carbon dioxide was a greenhouse gas, even though every time we exhale we put more CO2 it in the air, and carbon monoxide contributes to smog, even though the biggest source of CO is nature. OK, we won’t go there.)
The reason Bayer is tight with Aither is because Aither would build this new cracker plant on Bayer’s site near Nitro, WV (Kanawha County).
Yesterday’s announcement is certainly a move in the right direction. If you have commitments from customers ready to buy, it makes it easier to get the project funded by investors. The open season will run through July 20, and then Aither will caucus with Bayer to make a decision, and presumably an announcement of their future plans, by August 31.
Here’s yesterday’s announcement by Aither:
Aither Chemicals LLC today signed a Memorandum of Understanding (MOU) to launch an “Open Season” for ethylene from a potential catalytic ethane cracker in the Kanawha Valley region of West Virginia.
Aither’s agreement with Bayer MaterialScience LLC includes a non-binding Open Season to determine market interest for chemicals and plastics that would be produced by such a cracker. This could include ethylene, acetic acid, carbon dioxide, and carbon monoxide for sale at competitive market pricing or use in making downstream derivatives and other products such as ethylene oxide (EO). As part of the agreement Bayer would assist in the effort to evaluate third party interest in the chemicals stated above. Several ethane suppliers have expressed interest in supplying ethane to the project.
The Open Season will run from June 22 through July 20, 2012. Inquiries can be made by contacting Steven Cohen at Aither Chemicals, 614-336-7956 or [email protected]
After the Open Season, Aither Chemicals will evaluate the market’s response and decide on next steps by August 31, 2012. The Open Season process is commonly used in the midstream energy business to determine market interest in new business opportunities.
If Aither decides to proceed with the proposed catalytic ethane cracker, production could begin in early 2015.
“The Memorandum of Understanding is a first step towards building a catalytic ethane cracker in the Kanawha Valley region and we are optimistic that the market will respond,” said Aither CEO Leonard Dolhert.
Aither Chemicals brings its proprietary, scalable technology to crack ethane and convert it into other products. Aither’s technology was developed to take better advantage of ethane from shale gas, and to simultaneously lower the cost of producing ethylene, acetic acid, ethylene derivatives and/or acetic acid derivatives and other chemicals and plastics. Unlike steam cracking, which uses heat and steam to crack ethane, Aither’s process is a catalytic cracking process that uses 80 percent less energy and produces 90 percent less carbon dioxide (CO2) output. Much of that CO2 and/or CO output can be captured as a pure gas and utilized for the manufacturing of chemical and polymer products or used in other applications. Products that can be made from an Aither cracker and associated downstream derivative operations include: ethylene, acetic acid, carbon dioxide, carbon monoxide, ethylene derivatives such as ethylene oxide (EO), ethylene glycol (EG), polyethylene (PE, LLDPE, HDPE), acetic acid derivatives such as acetic anhydride, ethylene-acetic-acid derivatives such as vinyl acetate monomer (VAM), ethyl vinyl acetate (EVA), and other ethylene derivatives and/or acetic acid derivatives. Aither is in the process of selecting a location to build its catalytic cracker.
Aither Chemicals plans to offer up to the following annual product volumes, or more if there is additional interest: 600 million pounds of ethylene, 300 million pounds of acetic acid, 80 million pounds of carbon dioxide, and 40 million pounds of carbon monoxide.
Renewable Manufacturing Gateway, a Pittsburgh-based financial advisory non-profit, will advise Aither on evaluating market response to the Open Season and financing production of the commercial catalytic cracker production plant.*
*Aither Chemical (Jun 21, 2012) – Aither Announces Open Season
- The Charleston (WV) Gazette (Jun 21, 2012) – Aither one step closer to cracker plant