A major Chinese investment in West Virginia's energy industry could include plastic resin production, according to an official with an industry group.
China Shenua Energy Investment Corp. Ltd. signed a memorandum of understanding with the United States government on Nov. 9 in Beijing, calling for $83.7 billion of investment in shale gas development and chemical manufacturing in West Virginia over a 20-year period.
No details of chemical manufacturing from the project were included in a news release from the West Virginia Department of Commerce, but industry official Keith Burdette told Plastics News that the investments are likely to include resin.
"If you look down the road, resin is part of the equation," Burdette said in a Nov. 15 phone interview. Burdette is president of the Polymer Alliance Zone of West Virginia, an organization that includes polymers and related industries in a five-county region. He served as Cabinet Secretary for the state's commerce department from 2010-16 and became president of PAZWV in September.
In a news release, Burdette added that the investment announcement "is proof that the relationships that have been built — and the commitment we have made to a business climate that can make investments here attractive and successful — are paying off in a big way."
Officials said in the Commerce Department release that China Shenua Energy selected West Virginia for the project "because of the state's position as a key energy-producing state and home to one of the world's largest shale gas reserves, underpinned by a longstanding relationship between the two entities."
The Appalachian region that includes parts of West Virginia, Ohio and Pennsylvania covers parts of the gas-rich Marcellus and Utica shale fields. Shell Chemical has begun work on a massive petrochemicals site, including polyethylene resin, in Monaca, Pa., near Pittsburgh. A second petrochemicals site in southeastern Ohio also may be developed.
West Virginia is expected to be the location of a storage facility for ethane — a precursor of PE feedstock ethylene. "I think if we'd had that storage facility already in place, some more of these projects would have been built," Burdette said.
"Shenua's commitment to the Appalachian storage hub has national implications, and will make our region a strategically important economic engine," he added in the release.
Shell's 1,200-acre site ultimately will have annual production capacity for 3.5 billion pounds of high density and linear low density PE, as well as 3.3 billion pounds of ethylene feedstock. It will source ethane from the massive Marcellus natural gas field and is expected to come online in late 2021 or early 2022.
The Pittsburgh area is within 700 miles of 70 percent of North America's high and linear low density PE processors, Pennsylvania state officials have said.
Regional officials have said that the region has the shale gas capacity to support four more ethylene crackers: three in the Marcellus and one in the Utica shale region. In Ohio, a joint venture between PTT Global Chemical of Thailand and Marubeni Corp. of Japan is expected to make a final decision on a petrochemical project in Dilles Bottom by the end of the year.
That project, which was first announced in early 2015, would include an ethane cracker and would produce ethylene feedstocks and resins, most likely polyethylene.