West Virginia cracker boosters say facility in design stage

23 December 2011 20:28  [Source: ICIS news]

HOUSTON (ICIS)--Advocates for an ethane cracker in West Virginia are taking the matter into their own hands with plans for a production facility, the manager of the group said on Friday.

The group of companies and individuals, Invictus, is making plans for an ethane cracker in West Virginia to take advantage of the Utica and Marcellus ethane production, the company manager said on Friday.

“We decided we need one of these [chemical plants] to revitalise the Kanawha Valley chemical industry [in West Virginia],” said Richard Neely, manager of Invictus.

“You can’t wait for somebody to come in and do it for you,” said Neely, who is also a partner at the Law Offices of Callaghan & Neely

Neely said Invictus is a group who have worked in the engery industry and can think creatively of how to build a petrochemical plant under new circumstances.

Invictus includes Cunningham Energy, Cunningham Engineering, Michael Callaghan and Neely. Cunningham Energy has 100,000 acres in Ohio for production of the Utica shale and also operates in West Virginia.

Invictus has 1,456 acres in Kanawha Valley for construction of the plant.

Process Engineering and Associates are designing various options for the plant for Invictus to select from, such as whether the plant will be a simple ethane cracker or would also produce fuels, such as diesel.

Invictus is raising $15m (12m) for engineering plans and designs for the plant and to determine what parts are needed and who potential suppliers would be, Neely said. He added the plans are necessary to attain an air permit and to attract investors.

West Virginia Secretary of Commerce Keith Burdette said he knows little about the project, except that the cracker does not have financing.

“Quite frankly, they haven’t submitted an outline of their project,” Burdette said. “We wish them well and are happy to help them, but I don’t think this [project] is likely.”

In addition to financing, Invictus needs commitments from shale producers for ethane to feed its cracker.

Analyst Dan Lippe with Petral Worldwide said Marcellus gas producers are reluctant to sign long-term contracts for any significant volume of ethane. With other ethane projects in the works, producers have become wary about sustaining strong ethane production for the duration of a long-term supply contract.

Lippe said there were a lot of “unrealistic expectations” concerning the amount of ethane in the Marcellus shale and how many projects can be kept supplied in the long term.

Shell plans to announce in January a location for construction of an ethane cracker in West Virginia, Pennsylvania or Ohio. Shell’s advantage is the company will produce much of the ethane for its cracker, limiting the need for supply commitments.

Burdette said West Virginia officials have been in discussions with Shell and a second undisclosed company about construction of an ethane cracker in the state.

($1 = €0.77)

By: Sheena Martin
+1 713 525 2653

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