Ethane

CNG/LNG | Ethane | Exporting | Industrywide Issues

Bear Head LNG Parent Lays off 13 People, “LNG…difficult market”
July 21, 2016July 21, 2016

We’ve previously reported on a number of LNG (liquefied natural gas) export projects planned for the eastern shore of Canada. There are four to five such projects, depending on how you count them. However, one of those projects–Bear Head LNG in Nova Scotia–seems to have the most momentum. It seems the project has received most (if not all) of the necessary permits it needs to proceed, the most recent one issued just last week (see Bear Head LNG Gets GHG Plan Approval from Nova Scotia). However, the parent company building Bear Head LNG, Liquefied Natural Gas Limited (headquartered in Australia), reports laying off a group of 13 high level executives in a bid to save money. With tens of thousands of people losing their jobs over the past few years, a company laying off 13 people seems pretty minor. But the way LNG Limited is presenting the news, and the way it’s being covered in the media, it makes us wonder about the financial stability of the company and indeed the future of the Bear Head LNG project. After all, if they fire 13 people to save what amounts to $3.15 million (A$4.2 million), and a project like Bear Head costs billions of dollars to build, oy vey!…
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Belmont County | Energy Services | Ethane | Industrywide Issues | Ohio | Processing Plants | PTT Global

PTT Clearing Ohio Cracker Site, Nearby Residents Must Move?
July 14, 2016July 14, 2016

In April 2015 PTT Global announced they had chose a site in Belmont County, OH as the site of for their $5.7 billion ethane cracker complex (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). In short order PTT began spending money on the project, doling out $100 million for two engineering firms to design the plant (see PTT CEO Arrives in OH to Announce First $100M for Cracker Plant). As for real estate, part of the chosen site is the 130-acre R.E. Burger Plant, a coal-fired electric generating plant owned by Ohio utility company FirstEnergy. The Burger Plant site is currently being cleared and remediated by FirstEnergy. However, the entire project will need something like 400-500 acres. So where will the extra real estate come from? MDN previously reported that PTT had signed an option to buy 300 acres adjacent to the Burger Plant site owned by Ohio-West Virginia Excavating (see 300 Acres Next to FirstEnergy Site Part of Belmont Cracker Plan). But it seems that still may not be enough. We spotted a story that says residents who live west of the Burger Plant site have been contacted to let them know they may need to move too…
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Ethane | Industrywide Issues

World’s First Ethane-Powered Ship Engine Completed, 2 More Coming
July 12, 2016July 12, 2016

Is this the future of engines for large gas-hauling ships? Mitsui Engineering & Shipbuilding Co. announced two weeks ago they have completed the world’s very first ethane-operated two-stroke diesel engine. The engine is one of three the company is building to power three LEG (liquefied ethylene gas) tanker ships for Hartmann Schiffahrt of Germany and Ocean Yield of Norway. The ships are being built in China. Why ethane as fuel? For one thing, it’s cheaper than heavy fuel oil (HFO), the traditional fuel source for ship engines. Plus it burns a whole lot cleaner–something increasingly important with new emissions regulations coming along. But the obvious reason is that a tanker full of ethane can always tap into that ethane as fuel for the ship, should the need arise. The Marcellus/Utica produces ethane in abundance and ethane exports now regularly take place via ship from the Marcus Hook refinery near Philadelphia. Might we one day see an ethane-powered ship hauling ethane leaving Marcus Hook for Norway? Maybe, since some of the Marcus Hook exports to date have gone to Norway (see Bon Voyage! First Ethane Export Ship Leaves Marcus Hook in Philly). So far eight of the ethane-powered engines have been ordered…
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Beaver County | Economic Impact | Energy Companies | Ethane | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell | Statewide PA

Shell Cracker will “Rebirth” Pennsylvania Manufacturing Base
June 30, 2016June 30, 2016

Can a single petrochemical facility, like Shell’s proposed ethane cracker plant in Beaver County, “rebirth” all of Pennsylvania’s moribund manufacturing base? That would be a resounding “Yes!” according to Marcellus Shale Coalition president Dave Spigelmyer and Pennsylvania Manufacturers’ Association president Dave Taylor. Writing a column in the Harrisburg Patriot-News, the two Daves make the case for just how big a hairy deal the coming Shell cracker in PA really is…
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Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell | Statewide PA

Shell Exec Shares Inside Story of Why They Chose PA for Cracker
June 29, 2016June 29, 2016

Ate Visser – Shell Chemical

Yesterday was the second and final day of the Northeast U.S. & Canada Petrochemical Construction Conference being held in Pittsburgh. And boy oh boy what a day it was! Ate Visser, vice president of Appalachia petrochemicals at Shell Chemical took to the stage and shared with attendees the behind-the-scenes reasons for why Shell elected to build a cracker plant in Pennsylvania. There were three reasons: (1) cheap ethane from the Marcellus/Utica; (2) close to major northeastern markets; (3) tax breaks offered by PA. Here’s comments made by Visser, as reported from several journalists in the audience…
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Energy Services | Ethane | Industrywide Issues | Kinder Morgan | NGLs | Ohio | Pipelines | Statewide OH

Kinder Morgan Gets a 50% Partner for Utopia Ethane Pipeline in OH
June 29, 2016June 29, 2016

Utopia map – click for larger version

In December 2013 Kinder Morgan announced they plan to build a new 12-inch ethane pipeline through Ohio, dubbed “Utopia” for Utica To Ontario Pipeline Access (see UTOPIA is Coming! The UTOPIA Pipeline, that is…). Utopia will run ~215 miles and will only be built in Ohio, before it connects to another pipeline that goes to Canada, therefore the Federal Energy Regulatory Commission (FERC) won’t be involved in permitting the pipeline. Utopia has been less controversial than other pipeline projects in Ohio, like NEXUS (see Why is UTOPIA Pipeline Less “Controversial” than NEXUS in Ohio?). The 50,000 barrels per day of ethane flowing through it will go to NOVA Chemical’s Corunna cracker plant in Sarnia–a plant we wrote about just yesterday (see Canadian Cracker Eyes Utica Ethane, Adding $2B Polyethylene Plant). Kinder Morgan has announced they are taking on a joint venture partner in the Utopia project. Riverstone Investment Group will become a 50% owner in the project in return for putting up 50% of the cost–or $250 million out of the $500 million it will take to build it…
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Braskem | Economic Impact | Energy Companies | Energy Services | Ethane | Industrywide Issues | Jobs | Ohio | Pennsylvania | Processing Plants | PTT Global | Shell | Statewide OH | Statewide PA | Statewide WV | West Virginia

Event Speakers Say More Crackers on the Way in the Northeast
June 28, 2016June 28, 2016

There was lots of cracker talk at the first Northeast U.S. & Canada Petrochemical Construction Conference & Exhibition in Pittsburgh yesterday. According to NGI’s ace reporter for Shale Daily, Jamison Cocklin, excitement over the Shell cracker announcement from a few weeks ago was “palpable” at yesterday’s event. There was plenty of talk about the Shell cracker–but the talk coming from the event that interests MDN is talk about both the PTT Global Chemical cracker planned for Ohio, AND the Braskem cracker planned for West Virginia. These other two world class cracker plants (similar in size and scope to Shell’s project) “remain on track.” Now that is news!…
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Energy Services | Ethane | Industrywide Issues | NOVA Chemicals | Processing Plants

Canadian Cracker Eyes Utica Ethane, Adding $2B Polyethylene Plant
June 28, 2016June 28, 2016

NOVA Chemicals Corunna cracker site – click for larger version

Shell recently committed to building a “world class” ethane cracker in Butler County, PA, outside of Pittsburgh (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). And as we mention in a companion story today, there are two more ethane crackers likely to be built–in Ohio and West Virginia (see Event Speakers Say More Crackers on the Way in the Northeast). With all of the cracker excitement, it’s easy to forget there’s already cracker plants processing Marcellus/Utica ethane–in the Gulf Coast and in Canada. Waaaay back in 2011 NOVA Chemicals signed a couple of agreements with Marcellus drillers to get ethane to feed their Ontario-based Corunna cracker plant (see NOVA Chemicals Signs Second Agreement for Marcellus Ethane to Feed its Corunna Cracker Plant). Marcellus ethane began flowing to the Corunna plant in July 2013 (see Big News: Marcellus Ethane Now Exporting to Canada Cracker Plant). In 2014 NOVA announced when the UTOPIA pipeline project is done, the Corunna plant will begin to take in Utica Shale ethane as well (see Canadian NOVA Chemicals to Ship Utica Ethane via UTOPIA). In March of this year, NOVA announced a $400 million upgrade on the way to the Corunna plant so it can handle even more Marcellus, and Utica, ethane (see Canadian Cracker Gets $400M Upgrade to Handle More Marc. Ethane). That upgrade will take 4-5 years. The new news is that NOVA is now planning to build a new world-class polyethylene facility near the Corunna cracker, and they’ll spend $1-$2 billion to do it. Behold the awesome economic impact of a cracker…
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Economic Impact | Energy Companies | Ethane | Industrywide Issues | Jobs | Processing Plants | Shell | Statewide WV | West Virginia

WV is “Major Winner” from Shell PA Cracker Plant
June 20, 2016June 20, 2016

The good vibes are still reverberating following Shell’s announcement that they will move forward with building a $3+ billion ethane cracker in Monaca, PA (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). It’s fantastic news for Beaver County, PA, and in fact all of PA. We’ve seen immediate positive effects, particularly in the local real estate market with announcement after announcement of new deals being done. However, the location of the cracker will be near both the borders of Ohio and West Virginia. Former state senator and current West Virginia Public Service Commissioner Brooks McCabe says the PA cracker is as good news for WV as it is for PA. He says WV is “a major winner” with the Shell PA cracker announcement. Here’s why…
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Axiall | Energy Services | Ethane | Industrywide Issues | M&A | Marshall County | Processing Plants | West Virginia

Westlake Chemical Buys Axiall, Enters NE Cracker Market
June 14, 2016June 14, 2016

In December MDN told you that Axiall Corporation, a large petrochemical manufacturer, had made a final investment decision to move ahead and build a $3 billion ethane cracker/petrochemical facility in Louisiana (see Final Decision: Axiall Building Ethane Cracker in LA…NE Ethane?). Based on comments and various news accounts, we shared with you the opinion that its almost certain the plant will be supplied by shale gas from the Marcellus/Utica region (see Axiall Announces New Cracker Plant for LA, Fed by NE Ethane). Axiall owns, among other things, a large petchem plant in Marshall County, WV, the former PPG chemical plant along W.Va. 2 which Axiall bought just three years ago. Last Friday Westlake Chemical, another large petchem manufacturer, announced they are buying Axiall lock, stock and barrel–for $3.8 billion. Among the comments Westlake made is that it “looks forward” to working on the ethane cracker plant in Louisiana. Welcome to the Marcellus, Westlake!…
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Ethane | Industrywide Issues

What Happens to Marc./Utica Ethane Until Cracker Plant Launches?
June 14, 2016June 14, 2016

The Shell ethane cracker plant “yes” announcement is still, a week later, reverberating across the northeast (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). However, it’s going to be five, loooong years before the plant is actually up and running and processing ethane. So what happens to all of the excess ethane in our region in the meantime? There are some (precious few) pipelines to carry it to markets where it can be cracked, including Canada and the Gulf Coast. Or perhaps pipelined to Philadelphia where it can be loaded on ships and exported to Europe. But those options only handle a relative thimbleful of the ethane we have. Most ethane is blended with methane and sent down the pipeline to be sold as “natural gas”–something called ethane rejection. Separate and sell? Or reject? It all depends on the economics and available markets. Here’s a closer look at what happens to Marcellus/Utica ethane for the next five years, until the Shell cracker goes online…
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Energy Companies | Ethane | Industrywide Issues | Processing Plants | Shell

Shell’s PA Cracker Plant Will Increase Shale Drilling in Region
June 13, 2016June 13, 2016

The euphoria over Shell’s announcement last week committing to building a multi-billion dollar ethane cracker plant in Monaca (Beaver County), PA still hasn’t subsided (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). Although the plant won’t be ready for five years–it takes that long to build one–already the plant has been a shot in the arm. As we noted on Friday, commercial real estate is taking off in the region (see Shell Cracker Plant Will Spur Real Estate Deals 150 Miles Away). However, there is another reason the Shell cracker is good for PA and for the shale industry: it will encourage more shale drilling. Currently Marcellus and Utica drillers have very limited options when it comes to selling ethane. Ethane is an NGL (natural gas liquid) that comes out of the borehole along with methane and other hydrocarbons. Some estimates say in the NGL-rich area of southwestern PA and eastern OH, some 20% of what comes out of the ground is ethane–at least for some wells. Right now most drillers have to dispose of that ethane–it’s an expense! When the cracker starts up operations, that ethane can be sold to Shell, helping the balance sheet of drillers. If you can get more money from what you’re getting out of the ground, you’ll do more drilling. Pretty basic common sense. In anticipation, CONSOL Energy already has a contract to sell Shell some of its ethane…
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Beaver County | Economic Impact | Energy Companies | Ethane | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell

How Republican Tom Corbett Convinced Shell to Locate Cracker in PA
June 13, 2016June 13, 2016

Former Gov. Tom Corbett

There’s no question that Tom Corbett was ten times the governor that Tom Wolf is now. Wolf is an undisputed disaster. Good thing Corbett is the one who brokered the deal to get Shell to select Pennsylvania as the location for its multi-billion dollar ethane cracker plant. A big tax incentive helped lure Shell to the Keystone State, no question about it. But that’s not the only reason the company decided on PA. When it comes to business and sales, there are a couple of tried-and-true axioms. One of those axioms is that people do business with people–not companies. Another is this: people buy from people they know, like and trust. Take any one of those elements away, and you don’t make a sale. So how did Tom Corbett “sell” Shell on PA as the location? There were a number of factors, but one way that stands out as a shining example: Corbett treated the Shell execs to a Pittsburgh Steelers game…
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Braskem | Energy Services | Ethane | Industrywide Issues | Odebrecht | Processing Plants | West Virginia | Wood County

A Pulse! WV Ethane Cracker Project Comes Back from the Dead
June 10, 2016June 10, 2016

What’s this? The all-but-dead ethane cracker project planned for West Virginia has new life! (Perhaps the Shell announcement has something to do with it?) Brazilian company Odebrecht has pulled out of the Appalachian Shale Cracker Enterprise (ASCENT) project previously announced for the Parkersburg, WV area (see Odebrecht Pushes the Pause Button on WV Ethane Cracker). However, Odebrect subsidiary Braskem has confirmed they will now move forward with developing the project on their own. If this bears out, it is fantastic news for a state that (in our opinion) deserves a cracker. But before you get overly excited, Braskem’s announcement that they are now the lead on the project is still not a confirmation they will build it. Braskem is still in the evaluation stage…
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Economic Impact | Energy Companies | Ethane | Industrywide Issues | Ohio | Pennsylvania | Processing Plants | Shell | Statewide OH | Statewide PA | Statewide WV | West Virginia

Shell Cracker Plant Will Spur Real Estate Deals 150 Miles Away
June 10, 2016June 10, 2016

Gentlemen, start your engines! Your economic engines, that is. The news earlier this week that Shell has made the commitment to move ahead and build an ethane cracker plant in Monaca, PA has, as we knew it would, set the region buzzing (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go! and Shell PA Cracker Plant Project a Lot Bigger Than First Thought). With the decision now made, those in the real estate community are salivating over how that decision will reverberate throughout the region. There is now an effort underway to lure manufacturers in Texas and along the Gulf Coast area to consider setting up in the western PA (and eastern OH and northern WV) area instead–to take advantage of being that much closer to the biggest market in the country–the East Coast. One real estate pro says commercial real estate for up to 150 miles away is likely to be impacted by the decision to build the cracker plant in Monaca…
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Beaver County | Economic Impact | Energy Companies | Ethane | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell | Statewide PA

Shell PA Cracker Plant Project a Lot Bigger Than First Thought
June 8, 2016June 8, 2016

Artist’s rendering of Shell Monaca Ethane Complex – click for larger version

Yesterday MDN was one of the first to bring you the fantastic news that Shell has decided to move forward with building their multi-billion dollar ethane cracker plant (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). Shell mentioned their positive final investment decision (FID) as part of a larger, wide-ranging announcement on their plans for the next few years and beyond. They were slow off the mark, but Shell finally issued a separate press release about the FID for the Monaca, PA ethane cracker plant complex. As usually happens with a story this big, more details have come out after the initial announcement. For example: Shell’s initial estimate for the cost of the project, more than four years ago, was “$2-$3 billion.” Now? They won’t say. But some news sources are reporting it will be closer to a $6 billion investment. One even goes as high as $11 billion! What Shell *is* saying is that construction on the main part of the facility will begin in 18 months, with production expected to flow beginning “early in the next decade”–which we take to mean sometime around 2020 or 2021. Shell says the project will provide work for 6,000 temporary construction workers while it’s being built, and 600 permanent, full-time employees to operate the facility once it is built. Needless to say, local economic and government leaders in the Pittsburgh region are ecstatic with the news. Here’s more details about the Shell ethane cracker coming to PA, along with select reaction and comments…
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