Shale deposits drawing plastics attention to Ohio Valley

Houston — The shale-rich Ohio Valley region continues to draw interest from materials firms because of its abundant supplies of natural gas.

The region now produces 50 percent more oil and gas than it did during its previous peak in the 1970s, Greg Kozera said June 5 at Global Plastics Summit 2019 in Houston. Kozera is marketing director for Shale Crescent USA, a trade group that promotes the Ohio Valley region of Ohio, Pennsylvania and West Virginia to potential investors.

Shell Chemical is making the region's potential a reality with a massive petrochemicals project near Pittsburgh that's set to open in the early 2020s. That project will include around 3.5 billion pounds of annual production capacity for polyethylene resin.

Shell, which is based in Houston and London, chose the western Pennsylvania site because of the availability of natural gas via hydraulic fracturing (fracking) from the Marcellus and Utica shale deposits. Shell officials also have touted the proximity of the region to a large number of American consumers and end markets.

A similar resin and feedstocks joint venture in Dilles Bottom, Ohio, is being analyzed by PTT Global Chemical of Thailand and Daelim Industrial Co. of South Korea.

At GPS 2019, Shale Crescent USA business manager Nathan Lord said that 85 percent of U.S. natural gas production growth from 2008-18 took place in the Ohio Valley. The region "produces more natural gas than Texas with half of the land mass," he added.

The area "is based on top of feedstock and in the center of customers," he added. "And a large amount of the U.S. population is within a one-day drive."

Lord also cited a 2018 study from IHS Markit, which co-hosted GPS 2019, that showed the Ohio Valley has a 23 percent cost advantage on PE and a 10-11 percent advantage on polypropylene vs, the U.S. Gulf Coast for material made and shipped in the same region.

"It comes down to a shipping advantage," he said. "Shell will be able to deliver material in 25-45 hours instead of in 25-45 days from the Gulf Coast."

"The challenge is to see the opportunity and go for it," Kozera added.