InterviewMany eye Bayer W Virginia sites for new cracker in US

25 August 2011 18:15  [Source: ICIS news]

US Bayer CEO Greg BabeBy Brian Ford

HOUSTON (ICIS)--Bayer has received several inquiries regarding the use of its West Virginia sites for an ethane cracker, a top company executive said on Thursday.

Bayer said in December it was exploring the idea of potential investors using one of its two sites in West Virginia for a cracker using ethane derived from Marcellus shale.

“We have had several inquiries,” said Greg Babe, head of Bayer MaterialScience and CEO of Bayer Corp in the US. Bayer Corp, headquartered in Pittsburgh, Pennsylvania, is the US subsidiary of the Bayer group.

“Starting in December of last year, when our offers have hit the news waves, we have had several inquiries, ongoing discussions, since then,” Babe said. “We still have multiple players interested in the idea and our sites.”

Babe did not elaborate on the discussions.

Shell announced in June it was developing plans for a world-scale cracker in the Appalachian region of the US, but it has not made a site decision.

Babe said he was open to either leasing or selling land on one of the Bayer sites for a cracker.

An “outspoken supporter of reinvigorating manufacturing in the United States”, Babe said the rich ethane content of the Marcellus shale gas reserves makes West Virginia a logical place for an ethane cracker.

“As we develop more of the Marcellus shale and more natural gas liquids become available, it could become a problem if there is not a good outlet for it. Clearly the timing of any of the developments for downstream usage is watched very closely," he said.

Bayer does not build, own or operate crackers, Babe said, but its two West Virginia sites sit in the middle of the shale play and offer several logistical advantages.

Bayer CropScience operates the 460-acre (186-ha) Institute Industrial Park site on the Kanawha river in the southwestern part of the state. In additional to Bayer facilities, tenants include Dow Chemical, FMC and other corporations.

The Institute site is on the Ohio river system, with adjacent rail, river and highway access, according to Bayer. The industrial part is within 500 miles (805km) of 63% of the US population and nearly 33% of the Canadian population.

Bayer’s 1,000-acre New Martinsville Industrial Park in the northern part of West Virginia includes more than 90 acres that are available for immediate occupation, with warehouses and highway and rail access as well as access to the Ohio river.

Despite current global economic worries, Babe said most of the producers who are exploring the idea of a new cracker “look at this as a strategic play, not a tactical one – I think a mid-term economic slowdown doesn’t necessarily have an impact on a strategic play, but time will tell”.

By: Brian Ford
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