Cracker plant plans still uncertain

Thursday’s announcement that a Brazilian company is considering a West Virginia site for a petrochemical processing plant related to the local natural gas industry may have little effect on a proposal for a similar plant closer to home, business sources say.

Petrochemical giant Odebrecht chose a site in Parkersburg, W.Va., to explore the possible location of an ethane cracker plant and three polyethlene plants, West Virginia Gov. Earl Ray Tomblin announced Thursday.

The estimated cost and timetable of the potential project weren’t disclosed, although officials said Odebrecht has a purchase option for the land. Sources close to the project have estimated the investment would be in the billions of dollars.

The complex would be known as ASCENT, which stands for Appalachian Shale Cracker Enterprise. Odebrecht will lead the project’s investment and financing, along with the operation of water and electric utilities. Plastics maker Braskem S.A. of Brazil will handle petrochemical-related activities.

The plant would convert ethane from Marcellus Shale natural gas into more profitable chemicals such as ethylene, which is used to make plastics, antifreeze and other products.

Youngstown-Warren Regional Chamber spokesman Tony Paglia on Thursday said the chamber remains optimistic that a similar plant proposed by Shell Chemicals in Monaca, Pa., near Pittsburgh also will materialize. Experts have speculated that the Utica and Marcellus shale areas should be fruitful enough to support more than one ethane cracker plant.

“We still have high hopes they will move forward in Pittsburgh. This area would benefit,” Paglia said. “The idea is the plastics industry will spring up around it. We have a lot of infrastructure, and that’s why so many of these oil and gas companies are coming here.”

Don Crane, president of the Western Reserve Building Trades, said Thursday he also remains hopeful that Shell’s proposal will come to fruition, triggering thousands of construction jobs, potentially for local building trades workers.

“A Monaca plant most certainly would (involve local trades people). That’s just over an hour’s drive,” Crane said. He pointed out that journeymen from the Western Reserve Building Trades also could find their way to Parkersburg to work on that plant, if they chose to travel.

Shell’s plans for the site in Monaca remain uncertain. Shell Chemicals initially announced plans to build an ethane cracker in Beaver County near Pittsburgh. That announcement came early last year with speculation that the plant could bring some 20,000 new jobs and billions of dollars in investments.

Since then, Shell has held an option to purchase land occupied by Horsehead Corp. which operates a zinc smelter on the property. Shell renewed the option to buy by signing a six-month extension on July 1. Some local taxing bodies, including Potter Township, have approved tax incentive deals and, along with Pennsylvania Gov. Tom Corbett, have said they expect Shell to make a decision about the ethane cracker plant early next year.

In recent weeks Shell spokesman Michael Marr declined to comment on the company’s plans.

Horsehead Corp. last month filed a 60-day notice with the state to warn workers of layoffs as it plans to begin closing the western Pennsylvania operations by year’s end.

The move was not unexpected because Shell’s $2.5 billion petrochemical plant proposal that was on the table for the site. Shell is still a year or more away from making a final decision on whether to build the multi-billion dollar plant at an industrial site about 40 miles north of Pittsburgh.

Natural gas exploration and drilling are increasing as companies tap into the rich Marcellus and Utica shales in the region.

While drilling in the Marcellus Shale has been opposed by environmental groups, other interests cite the jobs and investments exploration and drilling will create and the millions of dollars that will be infused into the economy.

Tomblin said groundwork on the Parkersburg, W.Va., project through the West Virginia Development Office has been going on for three years. He called the plan a “game changer for the state of West Virginia,” during Thursday’s announcement when he was joined by Odebrecht officials.

In addition to securing financing, the project would have to meet various regulatory and governmental approval and obtain contracts for long-term ethane supply.

“We’re not going to jump into a pool without knowing how deep the water is,” said Ascent spokesman David Peebles. “We are spending a fair amount of money. We’re going through a very deliberative process. I think we want to manage expectations. It’s not that we’re trying to be evasive, but we do not want to exaggerate or overestimate and have people’s expectations raised.”

The Marcellus Shale natural gas bed extends below parts of Pennsylvania, Ohio, West Virginia and New York.

The Associated Press contributed to this story.