Shell Ethane Cracker Gets Reprieve from Trump Steel Quotas

Shell ethane cracker plant under construction in Monaca, PA – so many cranes you can’t count them!

RINO Pat Toomey can rest easy–there will be no delays in building the $6 billion Shell ethane cracker near Pittsburgh. The Trump Administration previously slapped a 25% tariff (i.e. tax) AND quotas on imported steel coming from countries dumping steel in our markets, driving out our own steel industry. Last week Trump lifted the quota from steel coming from certain countries, including Brazil. Shell is getting steel they need for the cracker from Brazil. Indeed, Shell’s Brazilian steel is already sitting in a U.S. port, undelivered due to the quota (a limit on how much can be imported). Now Shell’s steel can get shipped to Pittsburgh and used by the army of people working there. But get this: Shell will still have to pay the 25% tariff/extra charge for their Brazilian steel. Toomey, an early and persistent Trump critic (and a DC swamp dweller), one of PA’s two U.S. Senators, recently claimed Trump’s quotas/tariffs would result in layoffs and delays at the cracker (see Sen. Pat Toomey Claims Trump Tariffs Will Delay Shell Cracker). With that barrier now gone, Toomey will have to find something else to criticize about Trump. How about his hair?…
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How MarkWest Gets Marcellus/Utica NGLs to Market

The Marcellus and Utica Shale layers in Southwestern Pennsylvania, northern West Virginia and eastern Ohio produce a boatload of NGLs–natural gas liquids. One company had the foresight to plan a strategy to separate, transport and sell those NGLs. That company was MarkWest Energy, now known as MPLX following a purchase by/merger into Marathon Petroleum. MarkWest’s plan is firing on all cylinders. The experts at RBN Energy have analyzed MarkWest’s initial strategy, now largely complete, and their long-term strategy, still in the works, to give us a great snapshot of how NGLs are moving from our region to Midwestern and Canadian markets…
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Local Leaders Get Ready for Belmont County, OH Cracker Plant

It sure feels like PTT Global Chemical, the Thailand-based petrochemical giant that says it wants to build an ethane cracker in Belmont County, OH, is getting close to making a positive final investment decision (FID). On Monday we told you that an Ohio State Representative, Andy Thompson, said such a decision will be forthcoming in “a month or so” (see PTT Decision on Ohio Cracker Announced in Next “Month or So”). We have more evidence of an impending decision. Recently two dozen local county officials, from both sides of the Ohio River, went on a field trip to Beaver County where Shell is building their $6 billion ethane cracker. The officials wanted to see, first-hand, how the project is impacting the local area. They got eyes- and earsful. They came back jazzed. Here’s our point: A horde of local officials doesn’t traipse around the countryside wasting time unless they are convinced the project is going to happen. From the language this group of officials is using, and their overall demeanor, we’d say the PTT Belmont cracker is a happening project…
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PTT Decision on Ohio Cracker Announced in Next “Month or So”

Sometimes you spot an innocent, off-the-cuff remark that’s not really part of the intended story–but has huge meaning. Such was the case when we spotted a story quoting Ohio House of Representatives member Andy Thompson (Republican, 95th District covering Carroll, Harrison and Noble counties, and portions of Washington and Belmont counties). Thompson, who (to his credit) is not running for reelection after four terms, gave a speech at the Ohio Mid-Eastern Governments Association last week in St. Clairsville. In his remarks, Thompson talked about the work of Shale Crescent USA, an economic development organization formed a few years ago to encourage business growth in the Ohio Valley based on low natural gas prices that allow manufacturers to operate more efficiently–with easy access to half the population of the United States and Canada. Although Thompson’s focus was not on the PTT Global Chemical ethane cracker project potentially planned for Belmont County, he had some VERY interesting remarks about that project and others like it…
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DOE Sec. Perry Attends Cove Point LNG Ribbon-Cutting Ceremony

Yesterday a bunch of dignitaries gathered in Lusby, Maryland to celebrate the launch of Dominion’s Cove Point LNG facility with a ribbon-cutting ceremony. Yes, the facility has been up and running since April (see Cove Point LNG Ships First Marcellus Cargo to Japan). This was a well-deserved, back-slapping soiree, made all the more sweet for the obstacles Dominion had to overcome from antis when building the facility. Joining the celebration were officials from Japan and India (the countries buying all of the gas shipped from Cove Point), along with the top brass from Dominion. Special guest of honor was Dept. of Energy Secretary Rick Perry, there to deliver a message from his boss, Donald Trump. Perry said Trump is, “eager to unleash our bounty to the world” and that’s why President Trump is “so supportive of this infrastructure project right here in Cove Point.” Very very supportive. 😉 Here’s how it went down yesterday on the shore of the beautiful Chesapeake Bay…
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Progress on US Methanol Plant in Institute, WV – Praxair Providing O2

US Methanol broke ground last September in Institute (Kanawha County), WV to build its very first methanol production plant (see US Methanol Breaks Ground on First Plant in West Virginia). Methanol plants convert natural gas into methanol, used as a chemical feedstock (raw material) to create other things, like gasoline, antifreeze, plastic bottles–even LED and LCD screens. Methanol plants use a LOT of natural gas, hence our interest. A number of dignitaries attended the groundbreaking in Institute, including colorful WV Governor Jim Justice. Factoid: the plant in Institute is being constructed/assembled from a deconstructed methanol plant from Brazil. The new plant, called Liberty One, was supposed to open in mid-2018. That’s now changed. It’s been a while since we’ve reviewed Liberty One and its progress. It popped up on our radar when we spotted a press release from Praxair, an industrial gas company, announcing they have been selected as a partner to provide Liberty One with oxygen–lots of oxygen–to be used in the plant as part of the chemical process of converting methane into methanol. When we checked the Liberty One project site, we noticed the timeline to complete the plant has changed–from the previously announced mid-2018 to fourth quarter of 2019…
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Europe Building New Cracker, to be Fed by Marcellus/Utica NGLs

Here’s some exciting news: The first ethane cracker plant to get built in Europe in the past 20 years has just been announced by INEOS. Based in Switzerland, INEOS is a young but rapidly growing chemical company with roughly $40 billion in sales per year. INEOS’ competitors would be companies like BASF, Bayer and Dow Chemical. INEOS has its fingers in a lot of pies. For example, the company currently has two ships that shuttle Marcellus and Utica Shale ethane from Philadelphia to Scotland and Norway (see Ineos Gets Ready to Begin Ethane Exports from Marcus Hook, PA). INEOS has also been tapped to provide the technology for an ethane cracker plant to be built in Belmont County, OH (see PTT Taps Swiss Company INEOS for OH Cracker Plant Technology). INEOS already owns their own cracker plant in Scotland (see Cracker Plant in Scotland “Brought Back to Life” Thx to Marcellus Ethane). Now the company plans to build a €2.7 billion (US$3.2 billion) cracker plant and propane dehydrogenation unit in northern Europe. A specific country/location has not yet been selected. An INEOS official said, regarding the new cracker facility: “All our assets will benefit from our ability to import competitive raw materials from the US and the rest of the world.” Our translation: We love cheap Marcellus/Utica NGLs, and this plant will use lots of it…
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FERC Issues Favorable Enviro Assessment for Rhode Island LNG Plant

Click for larger version

In 2016 MDN told you about a plan by utility company National Grid to build a teeny tiny LNG liquefaction plant in Providence, Rhode Island (see Rhode Island Commies Oppose “Fracked Gas” LNG Plant). The Fields Point LNG plant, facing stiff opposition from a small group of RI House and Senate members (who said they hate fossil fuels), would cost $180 million and liquefy 20 million cubic feet (MMcf) of natural gas per day and store it. All of the opposers–socialist Democrats–called on FERC to reject the project. Nearly two years later, FERC just issued a favorable environmental assessment (EA) for the project. No, it’s not a final approval–but it’s the one key step prior to a positive final approval. FERC will almost certainly now approve the project, much to the consternation of the fossil fuel haters…
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WV Ethane Cracker Plant Rumored to be Back On Again

It increasingly looks like LyondellBasell Industries, one of the largest plastics, chemicals and refining companies in the world, will buy out/take over Braskem, the largest petrochemical company in Latin America (headquartered in Brazil). Braskem and its parent company Odebrecht, as you may recall, was hot-to-trot to build a multi-billion dollar ethane cracker near Parkersburg, WV–four years ago. Odebrecht got mired in scandal in Brazil and that put things on hold in 2015 (see Odebrecht Pushes the Pause Button on WV Ethane Cracker). But in 2016 it appeared the project may rekindle (see A Pulse! WV Ethane Cracker Project Comes Back from the Dead). Since that time, we’ve not heard much. A rumbling here and there, but not much. Now that LyondellBassell is actively pursuing Braskem, there is once again excitement about the cracker project in WV. MDN has heard from an industry source that if Braskem sells to LyondellBassell, the Parkersburg cracker plant will be a high priority. In fact, an expert speaking at the recent NGL storage hub event in Southpointe mentioned the WV cracker by name as one of three projects that he thinks will get final approval in the next 12 months (see Industry Expert Says 3 More Crackers Coming to M-U). Here’s news about how M&A deals happening on other continents directly affect our region–how a LyondellBassell purchase of Braskem may indeed reignite the Parkersburg ethane cracker project…
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PTT Awards Belmont Cracker Engineering Contract to Bechtel

PTT has awarded the contract to build the Belmont, OH ethane cracker to Bechtel. At least, that’s the rumor swirling around. We have to say right up front, this information has not yet been announced and therefore is not 100% verified–but we’ve talked to a highly placed industry source and we believe it to be accurate. Below we offer insight into why we believe this information is accurate, and why PTT has not yet made their official final investment decision (FID) announcement, and when they might do so…
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Industry Expert Says 3 More Crackers Coming to M-U

Last week the second annual Appalachian Storage Hub Conference convened at the Hilton Garden Inn Pittsburgh/Southpointe. As we pointed out in a post last week, the main topic of discussion was the $10 billion NGL/ethane storage hub (see Southpointe Event Focuses on M-U NGL Storage Hub). As big as the storage hub project is (and the news surrounding it), there was even bigger news coming from the event: 3 more ethane cracker projects for the Marcellus/Utica are likely to announce in the coming year! Tom Gellrich, principal of Top Line Analytics, talks to a lot of people. He’s an insider. At last week’s event, Tom shared some of his insights. He said PTT Global will commit to its previously announced cracker in Belmont County, OH, sometime this year. No real revelation there–we’ve been expecting such an announcement for the past two years. That’s one of three. Then Tom said the on again, off again Braskem/Odebrecht plan to build a cracker near Parkersburg, WV is on again and he expects an announcement to that effect in the next year. Wow! That’s two of three. And then Tom teased the crowd by saying there’s a THIRD project bubbling in the background. No details on who is behind it or where it will be located. Tom says to look for an announcement on this third cracker project by this time next year. Bonus: Tom believes Shell will take a hard look at building a new/second cracker right next to the first, after the first is completed (a fourth new cracker?). We have embarrassing riches of ethane crackers! Each one costing multiple billions of dollars to build…
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More MarkWest Construction Under Way in Doddridge County, WV

MarkWest Energy – Sherwood Complex

MarkWest Energy’s Sherwood Complex in Doddridge County, WV has been in operation since 2012. Since that time, MarkWest has built and currently operates nine processing plants at the complex, capable of separating methane from NGLs. The plant continues to grow. MarkWest is currently building another two processing plants at the Sherwood Complex, to be done and in operation this year. And if that isn’t enough, MarkWest says there is potential to build another six (!) processing plants at Sherwood. As we previously noted, Sherwood is right now the fourth largest gas processing plant in the U.S., and by the end of this year, it will be number one (see MarkWest Building 6 New Processing Plants, 3 Fractionators in 2018). One of the primary reasons for the rapid expansion at Sherwood is Antero Resources, which uses the Sherwood operation to service its vast WV drilling program. Needless to say, the ever-expanding Sherwood facility is a huge blessing, economically, to Doddridge County. Here’s a deep dive into future plans for Sherwood, and how the plant benefits the local community…
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Shell’s PA Ethane Cracker Plant Gets a Name: Shell Polymers

If you’ve read MDN for any length of time, you know about a $6 billion ethane cracker plant being built by Shell in Monaca (Beaver County), PA–near Pittsburgh. The plant will chemically “crack” ethane, an abundant natural gas liquid (NGL) that comes out of the ground along with methane, creating polyethylene from the ethane. Polyethylene is, in essence, raw plastic. Manufacturers in the region and beyond will use the plastic pellets Shell will produce at the plant to create an unlimited variety products. Shell is a smart company. They’re as much a marketing company as they are an oil and gas producer and petrochemical manufacturer. They know the value of positioning and mind share. We hadn’t thought about it previously, but we always just thought of and called the project the “Shell cracker plant.” The plant now has a name: Shell Polymers. The name Shell Polymers has been around for a long time but had fallen out of use when Shell largely exited the plastics business. With the new cracker coming online in the next few years, it’s time to revive the Shell Polymers name/brand and apply it to the cracker plant, which is how the project was being pitched at the last week’s NPE2018 (formerly called the National Plastics Exposition) in Orlando, Florida…
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$325M Gas-to-Liquids Plant Coming to Floyd County, KY

Last week RCL Chemical announced it has partnered with Y2X Infrastructure to build a $325 million gas-to-liquids (GTL) plant in Floyd County, Kentucky. GTL plants convert natural gas, a hydrocarbon, into other hydrocarbons, like diesel fuel, gasoline, solvents and waxes. An abundance of cheap natural gas in the Marcellus/Utica is one of the prime motivators for establishing GTL plants in the region. Although we’ve heard plenty of talk about such plants, we’ve only seen a few prototypes get built thus far. The RCL/Y2X story caught our attention because Kentucky hates new gas pipelines, yet wants to build a plant that will use gas coming from pipelines (see KY Court Decision Goes Against Pipelines re Eminent Domain). Perhaps attitudes in the Bluegrass State are changing? According to RCL, necessary infrastructure (pipelines) are already present in Floyd, one of the primary reasons RCL wants to locate in Floyd. The company says it will begin construction by the end of this year and have the GTL plant built and operating by 2020. The original plan, a few years ago, was to build a coal-to-liquids (CTL) plant in neighboring Pike County. That plan was eventually scrapped and this new plan to build a GTL project has taken its place…
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PTT Buys Another 300+ Acres for Belmont County, OH Cracker

In yet another very good sign that the proposed PTT Global Chemical ethane cracker plant in Belmont County, OH is headed for a positive final investment decision (FID), PTT has just purchased another 300+ acres to go along with the previous acreage they purchased as the site for the future cracker/petrochemical project. Last July MDN reported PTT had spent $13.8 million to buy 168 acres at the proposed site for a second Appalachia ethane cracker, in Belmont County, OH (see PTT Global Buys Land for Belmont, OH Ethane Cracker Plant). That site, the former R.E. Burger power plant property (owned by FirstEnergy Corp.), is the primary location for the proposed cracker. However, more land is needed. A deed filed earlier this week shows that PTT has purchased another 300+ acres for $17.5 million from the Ohio-West Virginia Excavating company. Together, both parcels are roughly 500 acres, which is more than enough land for the facility. Until now numbers like $6.5 billion have been thrown around as the total project cost. The number has now gone up–to as much as $10 billion! Here’s the latest good news that it’s looking better and better for a second ethane cracker in Appalachia…
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Still No Deal on Property Next to PTT OH Ethane Cracker Site

Homeowners who live near the location of a possible ethane cracker plant in Belmont County, OH are running out of time to negotiate a deal to sell their properties. Living next door to a cracker plant is not anyone’s idea of paradise. There will be noise, and smells and (yes) some air pollution coming from the plant. Best to sell now before the plant begins construction. However, representatives for PTT Global Chemical which will build the plant (IF it gets built), say they already have all the land they need for the facility (see PTT Global Buys Land for Belmont, OH Ethane Cracker Plant). Not needing the land puts PTT in a good negotiating position. There are 10 homes in the general vicinity of the proposed cracker plant whose owners want to sell. PTT says they’ve offered the homeowners 125% of fair market value for their homes. The lawyer representing the homeowners says the valuations are not accurate. However, it’s far from being a stand-off. There is no malice or vitriol. It sounds to us like both sides think a deal will get done. It just boils down to finalizing numbers. Here’s the latest on real estate for the proposed Belmont cracker plant…
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