Ethane

Ethane | Exporting | Industrywide Issues | Pipelines | Processing Plants

The Complex Issue of Ethane – Pipelines, Cracker Plants & Exports
February 18, 2014February 18, 2014

Ethane–a natural gas liquid (NGL)–is bountiful in parts of the Marcellus and Utica Shale. So bountiful, it’s causing problems. Until very recently, ethane was considered a waste product. You either had to burn it (increasingly hard to do because of regulations), or blend it with methane. It has been a cost center when in fact ethane is normally a profit center–something that makes drillers money. But you can only make money on it if you can get it to market.

Enter several ethane-specific, and coming soon, NGL pipelines that can carry ethane (and other NGLs) to the Gulf Coast, Canada or Philadelphia for processing and sale. The problem is, if you don’t have a long-term contract on one of those pipelines, you’re hosed. Your competitors are making money on ethane while you’re still spending money on it. That, in a nutshell, is why two regional ethane cracker plants are so desperately needed (Shell’s cracker plant in Beaver County, PA and Odebrecht’s cracker in Parkersburg, WV). The Pittsburgh Tribune-Review took an in-depth look at “the ethane issue” last Friday. It’s a good article providing us with insights into the complex issue of what drillers can/should/are doing with ethane:
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CONSOL Energy | Energy Companies | Ethane | Exporting | Industrywide Issues | NGLs | Pennsylvania | Pipelines | Statewide PA

CONSOL to Begin Ethane Shipments Next Year–to Europe?!
February 17, 2014February 17, 2014

CONSOL Energy is a big, important driller in the Marcellus and Utica Shale. Most of their operations are in “wet gas” areas–those locations that produce a lot of natural gas liquids (NGLs), like ethane, along with “dry gas” or methane. Although CONSOL has a lot of acreage in southwestern PA and in WV and eastern OH, the ethane they produce will not be going to a proposed new ethane cracker plant being built by Odebrecht in Parkersburg, WV. Instead, CONSOL is going to send their ethane by pipeline to an export facility in Philadelphia, and from there, on to Europe for processing and use in European petrochemical factories.

Why in the world ship ethane all the way to Europe for processing instead of selling it in your own back yard? Timing. CONSOL doesn’t want to wait the 4-5 years for an ethane cracker to be built (if it’s built at all). They’ve adopted a “bird in hand” strategy. They’d rather start shipping it next year, when Sunoco Logstics’ Mariner East pipeline is up and running, rather than wait. And so CONSOL, according to their announcement below, has locked in a deal with Ineos Europe AG. But don’t despair, CONSOL also previously signed an agreement with Shell to provide its cracker plant in Beaver County, PA with ethane–when and if that plant gets built…
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Energy Services | Ethane | Industrywide Issues | Marshall County | NGLs | Processing Plants | West Virginia | Williams

Williams’ Oak Grove, WV Plant (Slowly) Gets New De-Ethanizer
February 17, 2014February 17, 2014

The Oak Grove processing plant in Marshall County, WV is about to get its first de-ethanizer, a huge piece of equipment that strips ethane from “wet gas” so it can be sold, via pipeline. Until recently most ethane in the northeast has been a waste product for drillers–something that’s blended with other hydrocarbons or even burned (flared) to get rid of. However, with two new ethane pipelines up and running–one to Sarnia, Canada (Mariner West) and one to the Gulf Coast (ATEX), ethane is a valuable commodity. And so Williams is adding a de-ethanizer to their still-under-construction Oak Grove processing plant.

The de-ethanizer recently arrived by train at Benwood CSX rail yard along the Ohio River. Now the 123-feet long (and 14 feet wide) piece of equipment will go on a very special “superload” truck and it will take 3 days to go just 30 miles to reach the Oak Grove site. If you live in WV, you might want to reconsider plans to travel along routes WV-88 or US-250 later this week, unless you like moving along at 5 miles per hour…
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Economic Impact | Energy Services | Ethane | Industrywide Issues | Odebrecht | Processing Plants | West Virginia | Wood County

Houston Investment Firm a True Believer in WV Cracker Plant
January 28, 2014January 28, 2014

A huge vote of confidence by an investment firm that the ethane cracker plant recently announced by Gov. Earl Ray Tomblin and planned for Parkersburg, WV will actually be built (see WV Announces Brazilian Company to Build Ethane Cracker Complex). Siltstone Capital, an investment and advisory firm with corporate offices in New York and Houston, bought the old Blue Cross and Blue Shield building in downtown Parkersburg–vacant since 2009–to set up offices for the company and to lease out space they don’t use themselves.

Siltstone invests in companies in the energy sector: exploration and production, oil services, and midstream. If they weren’t totally convinced that the Odebrecht cracker plant would be built, you can be sure Siltstone would not have spent $475,000 on a vacant building in Parkersburg, WV (population 31,492)…
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Beaver County | Braskem | Energy Companies | Energy Services | Ethane | Industrywide Issues | Odebrecht | Pennsylvania | Processing Plants | Shell | West Virginia | Wood County

WV Cracker Plant has Already Purchased Land for Future Site
January 20, 2014January 20, 2014

In November, WV Gov. Earl Ray Tomblin announced he finally had him a cracker (see WV Announces Brazilian Company to Build Ethane Cracker Complex). By Dec. 31, Odebrecht, the company that will build the ethane cracker, had purchased the future site for their proposed plant in Wood County, WV through a holding company–for $10.9 million. A chemical plant currently located on the site employing 130 people will close in 2015. But have no fear–when the cracker plant is built, it will (for a time) employ 10,000 people to build it. It’s a massive undertaking that will ultimately lead to an estimated $7 billion economic injection just for the state of West Virginia. Talk about an economic revolution!

Compare WV’s proposed cracker to the Pennsylvania proposed cracker plant. Shell announced their intention to build a PA cracker plant in June 2011. How long did it take Shell to purchase the property on which they plan to build their cracker plant? They still haven’t purchased it. Let’s see: under 2 months to purchase the property for the WV cracker, still no purchase after 2 1/2 years for the PA cracker. Which one do you think is serious about building, and which one will get built first?…
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Energy Services | Ethane | Industrywide Issues | NOVA Chemicals | Pipelines | Processing Plants | Sunoco Logistics

Why Wait for a Cracker to be Built? Canadian Plant Cracking Now
January 20, 2014January 20, 2014

Although both WV and PA are in a race to build the northeast’s first ethane cracker plant, such a plant will not be operational for at least another 4-5 years–if all goes well. The problem is, what do you do with all of the ethane being produced now in the Marcellus and Utica Shale? Ethane is a valuable commodity that can be sold for a lot more than regular methane (or “dry gas”)–unless there’s no way to get it to a cracker. Then ethane becomes a waste product and actually costs money. The three ways to deal with ethane in the northeast right now are: (1) blend it with methane and other hydrocarbons, (2) flare it, i.e. burn it off, or (3) ship it out of the northeast via pipeline to a cracker plant. Option #3 is, of course, the preferred option for drillers–and an option that is now, as of a few months ago, a reality.

Although ethane has been flowing through the Mariner West pipeline (owned and operated by Sunoco Logistics) to the Corunna cracker plant in Sarnia, Ontario, Canada for the past few months, it has only been fully operational for a short time. Last Thursday, officials at the Corunna plant held a ceremony to commemorate full operation of receiving and processing Marcellus and Utica Shale ethane at the plant…
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Energy Services | Ethane | Industrywide Issues | Odebrecht | Processing Plants | Property Value | West Virginia | Wood County

Life is Good in Parkersburg, WV Thx to Cracker Plant Talk
January 10, 2014January 10, 2014

Even though it’s not yet a done deal, just the fact that Brazilian-based Odebrecht announced they might build a several-billion dollar ethane cracker plant in Parkersburg, WV is enough to cause a rush on real estate in the area. Empty office buildings are getting snapped up, hotels are calling the country economic development agency about possible new construction, and in one case a physician has contacted Parkersburg about setting up a practice specifically targeted at oil and gas workers. Life is suddenly very good around Parkersburg…
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CNG/LNG | Commodity Price | Ethane | Exporting | Industrywide Issues | NGLs

RBN Energy’s 2014 Predictions & the Marcellus Connection
January 6, 2014January 6, 2014

RBN Energy, headed by energy industry luminary Rusty Braziel (formerly an executive with Bentek and veteran of several large oil and gas companies), recently proffered its Top Ten Energy Prognostications for 2014. RBN is based in Houston, but a number of this year’s predictions from RBN are either directly or indirectly related to the Marcellus and Utica Shale, which tells you the stunning impact our northeast energy market is having on the world energy market.

Below is the abbreviated list of RBN’s “top 10” predictions for 2014–the Chinese Year of the Horse. Bear in mind what Rusty says, even as a prognostication, most (including MDN) believe as the gospel truth…
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About MDN | Anti-Drilling/Fossil Fuel | Commodity Price | Crude Oil | Economic Impact | Ethane | Health Impacts | Hydraulic Fracturing | Industrywide Issues | Litigation | MDN Resources | NGLs | Pipelines | Regulation

MDN’s Top 10 Most Important Stories of 2013 – Our View
December 31, 2013December 31, 2013

Yes it’s trite and certainly overdone, but hey, it’s the last day of 2013 and a slow news day. So MDN editor Jim Willis thought he would put together a list of what he considered to be the top 10 Marcellus and Utica Shale stories from 2013. It’s a look into what we believe, based on your input and feedback, to be the most relevant and important stories from this year. Enjoy!…
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Axiall | Energy Services | Ethane | Industrywide Issues | Processing Plants

Axiall Announces New Cracker Plant for LA, Fed by NE Ethane
December 27, 2013December 27, 2013

Georgia Gulf, now a huge chemical manufacturer, was founded in 1985 in Atlanta, GA. The company purchased the commodity chemicals business of PPG in early 2013 and renamed the combined company Axiall Corporation. In buying the PPG properties, Axiall inherited a large chemical plant operation in Natrium (Marshall County), WV–in the heart of the Marcellus/Utica.

Axiall announced last week they plan to build a $3 billion ethane cracker plant. However, they aren’t building it in the northeast near their chemical plant operations. Instead, Axiall plans to build their new cracker plant in Louisiana where they already have three other “major manufacturing facilities.” The new cracker, if built (all companies are careful to couch their language on that point) will no doubt be fed by Marcellus and Utica Shale ethane and (possibly) ethane from other plays. The new plant will not be online until 2018 at the earliest…
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Energy Services | Ethane | Industrywide Issues | NGLs | NOVA Chemicals | Processing Plants

NOVA Chemicals Plans Expansion of Corunna Cracker in Sarnia
December 19, 2013December 19, 2013

If the ethane produced in the Utica and Marcellus region doesn’t get processed in our region by way of an ethane cracker plant–and it won’t for at least another five years, even if a plant is green lighted today–it has to go somewhere else to be processed. That somewhere else is either the Gulf Coast or Canada, where large cracker plants are located. One of those crackers is operated by NOVA Chemicals in Sarnia, Ontario, Canada. Yesterday NOVA issued a press release that talks about their plans to expand the Corunna cracker to handle an additional 20% capacity coming from the Utica/Marcellus, which is good news for producers in the northeast.

NOVA is also planning to expand the manufacturing facilities that accept the output of the Corunna cracker, including a plant that manufactures polyethylene. Here’s the NOVA announcement from yesterday about what’s coming in the next few years in Sarnia…
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Energy Companies | Ethane | Industrywide Issues | Pipelines | Range Resources Corp

Range Resources Inducted into the Marcellus “1 Bcf/d Club”
December 17, 2013December 17, 2013

Range Resources issued an update today on recent activities and recent milestones achieved. They’ve just achieved a huge one. Range is now the third driller to achieve 1 billion cubic feet per day of production in the Marcellus Shale, joining Cabot Oil & Gas and EQT in that distinguished and exclusive “club” (see EQT 2Q13: Welcome to the Marcellus “1 Bcf/d Club”). Range also, ahead of an official announcement from Enterprise Products Partners, says that the ATEX (Appalachia-to-Texas Express) pipeline to the Gulf Coast is now up and running and they’re using it to ship up to 10,000 barrels of ethane per day. MDN knew the pipeline was in the testing phase but we did not know it’s now fully operational (see Let it Flow! ATEX Ethane Pipeline Testing Now, Online Soon).

The full update from Range:
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Energy Services | Ethane | Harrison County | Industrywide Issues | Kinder Morgan | NGLs | Ohio | Pipelines | Statewide OH

UTOPIA is Coming! The UTOPIA Pipeline, that is…
December 17, 2013December 17, 2013

Kinder Morgan announced yesterday a plan to build a new 210-mile natural gas liquids (NGL) pipeline that will connect multiple fractionation facilities in Harrison County, OH, to Riga, MI. From Riga, the NGLs will hitch a ride via the KM Cochin Pipeline east to Windsor, Ontario, Canada where they will be delivered to NOVA Chemicals. The new $300 million, 10-inch pipeline from OH to MI has been cleverly named Utica To Ontario Pipeline Access (UTOPIA). The NGLs that will flow through the pipeline will already be refined (“fractionated” or separated) and will include ethane and propane.

Here’s Kinder Morgan’s good news announcement that UTOPIA is coming:
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Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell | Statewide PA

PA Sen. Bob Casey “Pressures” Shell to Commit to PA Cracker Plant
December 12, 2013December 11, 2013

This is rich. MDN has long chronicled the flakiness of U.S. Bob Casey (Democrat, PA) on the shale drilling issue. On one hand he wants the heavy hand of the federal government to regulate drilling, violating the Constitution in doing so. On the other hand, like a typical sleazy politician, he has his hand out and wants the money and jobs shale drilling generates (see The Two Faces of Sen. Robert Casey (D-PA) on Shale Drilling).

The hand-stuck-out-for-money-and-jobs Casey is manifesting again at present. He just fired a letter off to Shell to “pressure them” into making a decision about moving forward with an ethane cracker in PA. Which is kind of funny, that he’s posturing and preening and pretending to goad Shell along when Shell is already well along and likely to move forward with no regard for what Bob Casey wants or thinks (see Odds in Favor of a PA Ethane Cracker Just Went WAY Up). What a waste of a Senate seat. Here’s what the preening Bob Casey said to Shell…
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Energy Services | Ethane | Industrywide Issues | MarkWest Energy | Pennsylvania | Pipelines | Washington County

MarkWest Extends Open Season for “Little” Ethane Pipeline
December 11, 2013December 11, 2013

MarkWest conducted an open season for their “little” 30-mile ethane pipeline that will run from Majorsville, PA to Houston, PA (in Washington County) from early November until December 9th. The MarkWest Liberty Ethane Pipeline is a pipeline to other pipelines (see MarkWest Open Season for “Little” Ethane Pipeline). Ethane arriving in Houston, PA will be able to hitch a ride out of the northeast via other pipelines to cracker plants and processing facilities in Canada and the Gulf Coast.

Apparently the open season didn’t garner as much business as MarkWest had hoped, because yesterday they announced “ya got a few more days to sign up.” The new deadline for the open season is this Friday, December 13th at 5:00 pm Eastern. So hurry and sign up, while you still can! Here’s the MarkWest announcement from yesterday extending the open season for the Liberty Ethane Pipeline:
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Economic Impact | Ethane | Industrywide Issues | Jobs | Ohio | Processing Plants | Statewide OH | Statewide WV | West Virginia | Wood County

More Details Leak About Proposed WV Ethane Cracker Plant
December 9, 2013December 9, 2013

A few weeks ago WV and Brazilian-based Odebrecht announced plans to build an ethane cracker plant near Parkersburg, WV (see WV Announces Brazilian Company to Build Ethane Cracker Complex). Wayne Dunn, the president of the commission that governs Wood County, WV where the cracker would be built, recently said some very interesting things about the cracker. One comment: he’s known about the Odebrecht cracker for more two years! Congratulations to a politician that can keep a secret that long.

Dunn also said he pegs the chances that the Odebrecht cracker will be built at somewhere between 60-80%. He says it’s far from a done deal, but the odds are better that it will be built than not. Here’s a few more interesting “insider” insights into the proposed cracker plant coming to Parkersburg, WV:
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