Ethane

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    WV’s Northern Panhandle Sits in the Shale Catbird Seat

    The Northern Panhandle of West Virginia is doubly blessed. The Panhandle is four counties: Hancock, Brooke, Ohio and Marshall. Some add a fifth–Wetzel County. The first four counties in the list sit in a slice of real estate located between Pennsylvania and Ohio. The Panhandle currently produces 38% of WV’s natural gas production, and nearly 70% of its oil production. That’s the first blessing–good rock sits under those counties. The second blessing is the panhandle’s location between PA and OH. On one side, sitting just a few minutes away, is the mighty Shell ethane cracker plant, currently under construction in Monaca (Beaver County, PA). On the other side, also just a few minutes away, sits the proposed PTT Global Chemical ethane cracker site in Dilles Bottom (Belmont County, OH). The second blessing is this: many petrochemical and manufacturing companies will build, even relocate, their operations to take advantage of the raw materials that will come from both cracker plants. And guess where many of them will choose to locate? Yep–right smack in the middle, which is where the Northern Panhandle happens to be–sitting in the catbird seat…
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    Ambridge Water Authority Strongly Opposes Shell Ethane Pipe Route

    Shell has had pretty smooth sailing with their proposed 97-mile Falcon ethane pipeline project–a pipeline that will feed the mighty $6 billion cracker plant Shell is building in Beaver County, PA. Shell did not use eminent domain but instead negotiated with (paid big bucks for) rights of way along the pipeline’s path. That process continues. There have been some grumblings here and there, particularly from Big Green groups. But all in all, there has been remarkably little opposition–that is, until now. Shell filed an application to build the Falcon project back in October (see Shell Files PA Application for Ethane Pipe to Feed Cracker Plant). On Jan. 20, Shell filed an application for federal stream crossing permits–something the PA State Dept. of Environmental Protection (DEP) issues (see PA DEP Invites Public Comment on Shell 60-Mile Ethane Pipeline). Because of the stream crossing application, the Ambridge Water Authority (in Beaver County), an organization that oversees a reservoir that provides drinking water for ~30,000 people, is expressing “strong opposition” to the route of the Falcon pipeline. Wait a minute. Didn’t Ambridge know the route back in October, when Shell first filed? Yes. However, the stream crossing permit application reveals details either not in, or not obvious, in the original application–details that the pipeline will go under three streams that feed the Ambridge reservoir. That’s got the board up in arms. In a statement, the Water Authority said, “we will do everything in our power to try and have the pipeline relocated outside of our watershed and away from our main, and only, raw water line.” Whether or not there’s any legitimacy to their concerns, Shell now has a PR situation on its hands–the old “it’s going to poison our drinking water” canard that’s a favorite of those who oppose drilling and pipelines. It will be interesting to see how Shell handle’s this situation…
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    Landowners Who Negotiate with Shell Ethane Pipeline Get More $

    In February 2016, MDN exclusively broke the news that Shell had begun to sign leases with landowners for a 97-mile ethane pipeline (two branches) to feed their mighty cracker plant (see Exclusive: Shell Leasing Land for 2 Pipelines to PA Cracker Plant). Since that time we’ve tracked any news we could find that reveals what Shell is paying landowners in Beaver County (and elsewhere) for the right to run the ethane pipeline (called the Falcon Ethane Pipeline) across their land. So far, we’ve seen rates as high as $75 per foot, and as low as $43 per foot. We just spotted another mention. An extensive (and well written) article in the Pittsburgh Post-Gazette interviews a number of landowners who have dealt with Shell, signing leases to allow the ethane pipeline across their land. The article opens with the story of a couple and their attempt to negotiate with Shell. If you play too hard to catch, Shell might route the pipeline around your land, onto your neighbor’s land instead. But sign too early, and maybe you’re leaving money on the table. It’s a fine line–causing stress and strain. In reading the article we really perked up when we read about Ed Bilik, founder of Greensburg-based Western Pennsylvania Gas Leasing Consultants. Ed was the first guy to sniff out the eventual path of the pipeline–which he did by knocking on doors to see where Shell landmen had already visited. Bilik eventually got 41 landowners to sign with him, allowing Bilik to help them with negotiations. According to Bilik, “Shell started out offering $40 per foot for the right to lay two pipelines.” Bilik would not say how much his clients eventually got from Shell, but he did say this: “We exceeded that [amount] multiple times,” meaning his clients got a whole lot more than $40/foot when they signed. Here’s a portion of this enlightening article…
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    UTOPIA has Arrived! KM OH Pipe Flowing Ethane to Canadian Cracker

    UTOPIA Pipeline route – click for larger version

    In January 2016, Kinder Morgan (KM) committed to building the UTOPIA (Utica To Ontario Pipeline Access) pipeline, a 12-inch ethane pipeline that will run ~240 miles across the state of Ohio where it will connect with another pipeline and flow ethane all the way to a cracker plant in Canada (see Kinder Morgan Ready to Move Forward with UTOPIA East Pipeline). However, all was not utopia with UTOPIA–some Ohio landowners got a bumble bee in their bonnet and refused to deal. KM first sued them using eminent domain, then decided to alter the route instead and signed leases with more reasonable landowners (see UTOPIA East Pipe Re-Routes Around OH Antis, Drops Eminent Domain). Last June, KM’s vice president of public affairs, Allen Fore, said UTOPIA was under construction and due to go online in January 2018 (see UTOPIA NGL Pipeline Under Construction, Should be Online Jan 2018). And so it has! Yesterday KM announced UTOPIA is up and running and flowing ethane from the Utica/Marcellus all the way to a cracker plant in Canada…
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    PA DEP Invites Public Comment on Shell 60-Mile Ethane Pipeline

    Falcon Ethane Pipeline proposed route – click for larger version

    The Pennsylvania Dept. of Environmental Protection (DEP) is taking a close look at Shell’s proposal to build an ethane pipeline to feed the $6 billion cracker plant now under construction in Beaver County, PA. In fact, the DEP wants public input on the ethane pipeline–by Feb. 20th. Brief history: In February 2016, MDN brought you exclusive news that Shell had begun approaching landowners in Beaver County to get them to sign easements for two ethane pipelines to feed the mighty cracker plant they plan to build in the county (see Exclusive: Shell Leasing Land for 2 Pipelines to PA Cracker Plant). At that time Shell had still not fully committed to building the cracker–something they finally did in June 2016 (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). NGI’s Shale Daily broke a story in August 2016 that shed new light on the project–news that Shell is working on an ethane “pipeline system” with two “legs” to feed the cracker, confirming the tip we received in February (see Shell Working on 94-Mile Ethane Pipeline to Feed PA Cracker). Last October Shell filed an application with the PA DEP for the PA portions of the pipeline (see Shell Files PA Application for Ethane Pipe to Feed Cracker Plant). The DEP is now considering those portions–some 60 miles running through the state. Here’s how you can comment on/support the project…
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    Mercer County, PA Gears Up to Benefit from Shell Cracker

    “One word: Plastics” (The Graduate) – Mercer County, which is two counties and 50 miles north of Beaver County (located along the border with Ohio) is making plans now for how their county to grab some of the “low hanging fruit” that will appear when the Shell ethane cracker in Beaver County goes online in the early 2020s. You read that right. NOW is the time for counties in the region to make plans and set those plans in motion to attract some of the numerous businesses that will set up shop to be close to the cracker plant. Mercer County officials recently attended a forum where the topic was ancillary development that will happen because of the cracker plant. What is the low hanging fruit that will magically appear with the cracker? Manufacturing–and the jobs that go with it. In particular, manufacturing and jobs in the plastics industry. A regional trade organization–Penn-Northwest Development Corp.–is planning to hit the plastics industry trade shows this year. Penn-Northwest is working with counties like Mercer to help them market themselves to plastics manufacturers…
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    Ohio Continues to Drag Feet Approving Mountaineer NGL Storage

    We’ve written plenty about Mountaineer NGL Storage hub project proposed for Monroe County, OH, located just across the river (and border) from West Virginia (see our Mountaineer NGL Storage stories here). What do we know about the proposed project? The Colorado company behind the project plans to spend up to $500 million to build it; some 20 drillers have expressed interest in contracting with the facility to store ethane; and the nearby PTT Global cracker plant project (if it gets built) and the under-construction Shell cracker plant are both interested in connections to the facility. In November, we learned there is a construction delay until mid-this year (see Yet Another Update on Stalled Mountaineer NGL Storage Proj in OH). Why the delay? The delay is because of regulators in Ohio. There is no one agency charged with reviewing and issuing permits for the entire project–it involves three OH agencies. There also seems to be an issue with one of the agencies, the Ohio Dept. of Natural Resources (ODNR), becoming comfortable with storing NGLs in a salt cavern (done all the time in other locations). ODNR is dragging its feet, and members of the Ohio Oil and Gas Association (OOGA) are beginning to publicly voice their dissatisfaction with the delays…
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    Pittsburgh Presbyterians Call for Stop to Shell Cracker Construction

    It’s always a shame–in fact it grieves us–to see once-great Christian denominations succumb to a worldly rather than spiritual purpose and mission. It’s sad to see the modern day version of a golden calf erected in place of God. It’s happened again–this time with the Presbyterian denomination in Pittsburgh. An “umbrella group for 140 Presbyterian churches” in Allegheny County are calling on Shell to stop construction of their $6 billion ethane cracker plant project about 25 miles from Pittsburgh. That’s right–just stop now, throwing thousands of people out of work (not very Christ-like) and throwing away the $1 billion+ Shell has already spent on the fully vetted, fully permitted, fully discussed (for years) project. Why do the Presbyterians want work on the cracker plant stopped? Because the plant will produce “plastic products that have been linked to the death of animals and the diminishment of fragile natural habitats.” Yep. The Presbyterians are now anti-plastic. The very keyboard they typed up their tripe on is, of course, plastic. As was the computer and monitor they used, the chair they sat in, the clothes on their bodies and sneakers on their feet–all come from the plastics the Shell cracker plant will produce. Just for icing on the global warming cake, the Presbyterians are also demanding their denomination divest any of their considerable investments from companies remotely related to the fossil fuel industry. It seems that the golden calf of global warming has now replaced God in the Pittsburgh Presbyterian denomination. And yes, we do grieve over that…
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    PTT Global Chemical Officially Delays Cracker Decision Until 2018

    PTT Global Chemical, based in Thailand, continues to delay a final investment decision (FID) regarding their much-ballyhooed ethane cracker project in Belmont County, OH. In April 2015, PTT announced they are interested in building a ~$5 billion ethane cracker plant complex in Belmont County, OH (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). In May 2016, a story in the Bangkok Post said the final investment decision (FID) will definitely come in 2017. In December 2016, Belmont County officials said the FID would come by the end of March this year (see OH Cracker Final Decision Coming Soon, Site Now Cleared & Ready). But in February, PTT said the FID won’t come until “late 2017,” which is “several months later than we originally announced” (see PTT Global Delays Final Investment Decision for OH Ethane Cracker). Two weeks ago a PTT representative said the company will make some sort of an announcement “by the end of the year” (see PTT Global Final Decision re Belmont Cracker Plant Late Again). We now have the announcement: “PTTGC America will have a significant update that will demonstrate momentum for this project early in 2018. We thank all Ohio and Belmont County partners for their support, and we wish you a happy holiday season.” So the big announcement is that there will be another big announcement in “early 2018.” Yeah, we’re becoming irritated at being teased that the decision is just around the corner…
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    PTT Global Final Decision re Belmont Cracker Plant Late Again

    An MDN reader recently asked us, “Hey, what’s up with the Belmont County, OH ethane cracker? We haven’t read anything in a while.” You haven’t read anything on MDN, nor anywhere else, because there’s been nothing to read. PTT Global Chemical, based in Thailand, announced in April 2015 they are interested in building a $5 billion ethane cracker plant complex in Belmont County, OH (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). In May 2016, a story in the Bangkok Post said the final investment decision (FID) will definitely come in 2017, but they called the decision “delayed.” PTT disagreed with that assessment, saying a decision coming in 2016 or 2017 is not “delayed” (see PTT Global Says Belmont, OH Ethane Cracker NOT Delayed). In December 2016, Belmont County officials said the FID would come by the end of March this year (see OH Cracker Final Decision Coming Soon, Site Now Cleared & Ready). But in February, PTT said the FID won’t come until “late 2017,” which is “several months later than we originally announced” (see PTT Global Delays Final Investment Decision for OH Ethane Cracker). It’s pretty “late” in 2017, wouldn’t you say? A company representative says the company will make some sort of an announcement “by the end of the year,” but that’s all he will say. It certainly doesn’t seem as if an FID is in the cards in the next three weeks…
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    MDN Guide to Finding a Job at the Shell Cracker Plant

    Although Shell’s mighty $6 billion ethane cracker chemical complex won’t be completed until around 2020, Shell is not waiting with respect to recruiting talent to operate the plant. Shell recently launched a page on their main website dedicated to recruiting people for cracker plant jobs (see that page here). Please note these are not jobs building the plant, but instead are jobs working at the plant, after it’s built. The CBS affiliate in Pittsburgh, KDKA Channel 2, noticed the Shell jobs page for the cracker project and reports that “there are no job listings yet, those interested can sign up to receive email alerts when job listings are posted to the site.” It’s true folks can now sign up to receive new job postings via email. However, KDKA missed the fact that there are several jobs already posted related to the cracker facility…
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    More on that Massive $83.7B Chinese Investment in WV Shale/Petchem

    We’re still reeling after yesterday’s announcement that China has agreed to invest $83.7 billion in the State of West Virginia–largely in shale and shale-related petrochemical projects (see China Agrees to Invest Amazing $83.7 BILLION in WV Shale, Petchem). Let’s put China’s promised investment in perspective. The GDP (gross domestic product, or the value of all of the state’s economic activity) for WV last year was $73.4 billion. One expert calculates the entire investment by the Marcellus/Utica industry in WV so far has been about $35 billion. The investment by China, which will be spread out over 20 years, is larger than all of the economic activity in WV for a single year, and 2.5 times the investment made by the shale industry so far! That’s massive. It’s huge. It’s mind-blowing. There really aren’t words big enough for this investment–IF it comes to be. You see, what was signed in China yesterday is a Memorandum Of Understanding (MOU). It’s a handshake–a gentleman’s agreement. And sometimes those agreements disappear. So this is far from a done deal. However, we’ll take it. If even half of the promised investment becomes reality, it’s game-changing. It is, according to WV Gov. Jim Justice, the single largest private investment in the state’s history. Now that we’ve had 24 hours to digest the news, a number of people are talking. While we still don’t have specificity about the projects that will get funded with this money, we do have more insight. The first couple of projects to get funded will be electric generating power plants–powered by Marcellus/Utica gas. And we know where those plants will most likely be located: “one in Harrison County and one in Brooke County” according to head of the WV Chamber of Commerce. Cracker plants (plural) are also being talked about for WV. We’ve been monitoring the news since yesterday’s announcement and have collected a number of excerpts below of what people (in the know) are saying about this historic deal…
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    Weirton, WV Tries to Interest the Chinese in a Cracker Plant

    The early bird catches the worm. Not even a day had gone by when Patrick Ford, the executive director of the Weirton-based Business Development Corp. of the Northern Panhandle, piped up and signaled China that Weirton would be a great place to locate an ethane cracker plant. Ford said Weirton sits roughly halfway between Shell’s cracker plant under construction, and a planned cracker plant by PTT Global in Belmont County, OH. Weirton was considered for both of those projects but apparently there was an issue getting enough contiguous acreage for a large-scale project like a cracker. However, Ford says those issues are now resolved and Weirton is open for cracker business. Ford told a reporter, “We want to see a third ethane cracker in this region — and it should be in Brooke or Hancock County” (note that Weirton straddles both). We like Weirton’s plucky opportunism. Businesses and projects in WV should not sit on their hands. Get that Chinese money and get it quick, before it disappears into someone else’s pocket!…
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    Milestone: Construction Begins on Shell Cracker Plant Buildings

    A major milestone has been reached in the mighty Shell $6 billion ethane cracker facility project. Over the past year or so site preparation has been vigorous. Work at the site in Monaca (Beaver County), PA has included building bridges, relocating a state highway, improving existing interchanges, repositioning a rail line, and preparing foundations for the new complex. The prep work is now largely done–and this week begins construction of the buildings that will house four processing units–the ethane cracker itself and three polyethylene units. Also part of this next (final) phase of construction: a 900-foot long cooling tower, rail and truck loading facilities, a water treatment plant, an office building and a laboratory. Oh! And let’s not forget that Shell will also build a 250 megawatt electric generating plant that will provide all of the electricity needed at the facility–powered by Marcellus Shale gas, of course! Here’s an update from Shell, with a picture of the site as it is now…
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    Shell Taps Brit to Run the $6B Ethane Cracker Project in Monaca

    Shell’s $6 billion ethane cracker plant facility in Monaca (Beaver County), PA is about to ramp up construction of the numerous buildings that will house the equipment. Since 2014, Ate Visser, vice president of Appalachia petrochemicals at Shell Chemical, has been the guy in charge of the project (see Shell Exec Shares Inside Story of Why They Chose PA for Cracker). However, beginning now, Hilary Mercer, a native of Manchester, England (has worked at Shell for the past 30 years) is now the woman in charge of the project. Mercer is the new vice president of the cracker plant project. She has an interesting, globe-trotting history. Mercer says she likes to build “big projects.” Prior to landing in her role in PA, Mercer was in South Korea overseeing construction of the largest floating structure ever built. But building the huge cracker facility isn’t the only thing that jazzes Mercer about the project. She’s pumped at the prospect of building the commercial side–building a business from the ground up. Finding customers, branding, everything that comes with creating demand for the output from the mighty cracker facility. Here’s a look at the new leader of the Shell cracker plant project…
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    Locals Pumped About OH Cracker; WV Cracker Still Not Dead

    Belmont County Port Authority Director Larry Merry says he “can’t think of a single reason” why PTT Global Chemical won’t build a promised $6 billion ethane cracker facility in Dilles Bottom. Mike Jacoby, VP of business development for the Appalachian Partnership for Economic Growth concurs, saying he is “optimistic” and sees “no problems” ahead for the PTT cracker. In addition to locals in Ohio pumped about the PTT cracker and the promised final investment decision by the end of this year, there is still hope for a cracker plant in West Virginia too. WV officials say Braskem is still expressing interest in a cracker project in the Parkersburg area. Here’s some of the chitter-chatter among pumped-up officials attending a forum last month in Wheeling, WV…
    Read More “Locals Pumped About OH Cracker; WV Cracker Still Not Dead”