logo

Appalachia draws investment in plastics-related complexes

By: Frank Esposito

November 15, 2013

A flurry of activity has hit peaceful Appalachia.

Brazilian construction conglomerate Odebrecht on Nov. 14 unveiled plans to build a petrochemical complex including an ethane cracker and three polyethylene plants near Parkersburg, W.Va. That move will lead to the closing of an ABS resin plant operated by Sabic Innovative Plastics on the land, which Odebrecht will use for part of its complex.

A Shell Chemical executive also recently gave details of his firm’s proposed petrochemical complex in Monaca, Pa., although Shell declined to confirm that data.

Brazilian plastics giant Braskem SA will handle petrochemical-related activities and commercialization of PE at the Parkersburg site. Odebrecht is part-owner of Braskem, along with Brazilian national oil firm Petrobras. Braskem already operates polypropylene plants in the U.S. and is building a joint venture PE/ethylene plant in Mexico. The new Parkersburg-area project will operate as Ascent Appalachian Shale Cracker Enterprise.

“Ascent fits into the strategy of our utilities division, which seeks to invest in and manage industrial assets,” Odebrecht Environmental CEO Fernando Reis said in a news release.

West Virginia Gov. Earl Ray Tomblin described the Odebrecht announcement as “tremendous news for our state and our region.” Shale-based natural gas development has been thriving in the region, as use of hydraulic fracturing, or “fracking,” and horizontal drilling technologies have allowed energy firms to access material that was previously hard to reach. Natural gas can then be converted into ethane and then into feedstock ethylene.

An Odebrecht spokeswoman declined to provide capacity, investment or timing details. The firm is acquiring part of the land needed for the project from Sabic, which will close its 109-employee ABS plant in nearby Washington, W.Va., by mid-2015.

ABS production done in Washington will be moved to Sabic plants in Ottawa, Ill., and Bay St. Louis, Miss., officials said.

“Our decision to close the Washington site was a difficult one to make, but we are hopeful that the sale of the property will ultimately prove to be beneficial to the local economy,” plant manager Scott Dansey said in a statement. “We are also pleased to know that the third-party entity will consider hiring qualified, local workers if it builds its operations in Washington.”

Dansey added that the move is being done “to increase [Sabic’s] competitive position in the challenging global ABS market” and that the firm “is honored to have played an active role in the mid-Ohio Valley.”

Odebrecht employs 190,000 worldwide and had sales of $41.3 billion in 2012. The firm operates in defense, real estate, oil and gas, shipbuilding and other markets.

The picture at Houston-based Shell is a bit muddled. In mid-October, a company executive told a chemical industry trade magazine that the firm was doing engineering work related to land in Monaca, Pa., and that it planned to build a 3.3 billion-pound-capacity ethylene unit there, as well as two high density PE plants with 2.2 billion pounds of total capacity and a linear low density PE plant with 1.1 billion pounds.

The executive added that about half of the site’s feedstock needs will be met internally and that the site will not include ethylene glycol production. He also said the ethylene unit will use technology licensed from German firm Linde AG and Shell is doing engineering work with Linde and U.S. construction giant Bechtel Corp. But a Shell spokeswoman declined to confirm any of those details, saying in an email that “there is no update at this stage.”

“Our evaluation of the site continues,” she wrote. “The site evaluation process for a proposed project of this scale typically takes several years to complete, and we expect similar timing in this case.”

She added that Shell “has not made a decision to move its potential petrochemical project in western Pennsylvania into the [engineering] stage.”

Shell first announced its interest in the project in early 2012, saying it was considering building a cracker and PE plants in Monaca — which is near Pittsburgh — to take advantage of new natural gas supplies. The firm has an option to purchase industrial land previously occupied by Horsehead Corp.

Other projects proposed for the Appalachian region include Appalachian Resins Inc.’s plan to build a 500 million-pound-capacity PE plant near Wheeling, W.Va., and Aither Chemicals LLC’s interest in building a cracker and PE units in the region. No date has been set for either project.