US Petrologistics, Bayer mull W Virginia cracker deal - reports

28 June 2011 21:32  [Source: ICIS news]

A map of the Marcellus ShaleHOUSTON (ICIS)--Bayer would not confirm on Tuesday reports that US-based propylene producer Petrologistics is considering buying land from the company in West Virginia to build an ethane cracker.

If Petrologistics pursues the project, it would likely cost more than $1bn (€700m), the Houston Business Journal reported.

Following environmental and feedstock studies, construction could take about four years, the Oil & Gas Financial Journal reported.

Bayer spokesman Bryan Iams said the company would not comment on discussions it was having with any individual company.

“What I can tell you is that we are engaged in what I would categorise as serious discussions with several interested companies who are looking … at our New Martinsville site in West Virginia as a possible site for an ethane cracker," Iams said.

Petrologistics did not immediately respond to a request for comment.

West Virginia is among several states in the eastern US that lies on the Marcellus Shale, a large reserve of natural gas.

In December, Bayer said it is exploring the idea of potential investors using one of its two sties in West Virginia for an ethylene unit using feedstock from the Marcellus Shale.

Bayer's site in New Martinsville has about 1,000 acres (405 ha), and its Institute site has bout 460 acres.

Already, the West Virginia governor's office has created a Marcellus to Manufacturing Task Force, which is exploring the development of crackers in the state.

The 12-member group includes Greg Babe, chief executive of Bayer Corp and Bayer MaterialScience.

For Petrologistics, the possible ethane cracker is the latest project it is undertaking.

Earlier this month, the company filed a registration statement to raise $600m in an initial public offering (IPO). If Petrologistics goes through with the IPO, its units would be listed on the New York Stock Exchange under the ticker symbol "PDH".

Petrologistics's runs the sole propane dehydrogenation (PDH) plant in the US, capable of producing 544,000 tonnes/year of propylene.

A PDH plant relies on propane as a feedstock. In contrast, the majority of propylene produced in the US relies on oil-based feedstock.

Additional reporting by Stefan Baumgarten

($1 = €0.70)

For more on ethylene visit ICIS chemical intelligence
For more on Bayer visit ICIS company intelligence

By: Al Greenwood
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