Price and market trends: Brazil Odebrecht mulls ethane cracker, PE complex in W Virginia

22 November 2013 09:59  [Source: ICB]

Odebrecht, Brazil’s major contractor, is considering developing an ethane cracker and three polyethylene (PE) plants in a project called Ascent, short for Appalachian Shale Cracker Enterprise, according to West Virginia’s governor, Earl Ray Tomblin.

Odebrecht will oversee Ascent’s investment and financing as well as the operation of water and electric utilities, Tomblin said. Brazil-based Braskem would be responsible for petrochemical-related activities as well as the marketing the PE.

A purchase order has already been secured for the site of the proposed complex, the governor said.

Although Tomblin did not specify the location, Saudi Arabia-based SABIC had announced plans on 14 November as well to close its acrylonitrile butadiene styrene (ABS) plant in West Virginia, and the company signed an initial purchase agreement for the possible sale of the property.

Tomblin did not disclose a possible timeline or capacity of the Ascent complex. Moreover, the feasibility of the plant is still being considered, he said.

FEEDSTOCK CHALLENGE
However, securing long-term supplies of ethane will be the biggest challenge facing Odebrecht in developing an integrated polyethylene (PE) complex in West Virginia that would consume Marcellus shale gas in the northeast US, said consultant Peter Fasullo, principal at En*Vantage.

Until recently, Marcellus ethane was considered stranded with limited outlets, Fasullo said.

That is no longer the case, and ethane from the US northeast is heading to Canada, the US Gulf Coast and even Europe.

INEOS plans to import ethane from the US to feed its Grangemouth cracker in the UK as part of a survival plan to keep a petrochemical complex there running.

INEOS has already reached a 15-year agreement to ship ethane from the US east coast to its European crackers. The ethane would be supplied to the export terminals by the Mariner East pipeline.

In eastern Canada, NOVA Chemicals soon will be cracking ethane from the Marcellus Shale at its Corunna cracker.

The cracker’s ethane will come from the Mariner West pipeline, being developed by Sunoco Logistics and MarkWest Liberty Midstream & Resources.

The pipeline will have an initial capacity of 50,000 bbl/day, and it can be expanded as needed.

In addition, Enterprise Products is developing the Appalachia to Texas (ATEX) pipeline, which will take up to 190,000 bbl/day of ethane from the eastern US to the Gulf Coast by the first quarter of 2014.

Also, Williams and Boardwalk are building a natural-gas-liquids (NGL) pipeline from the Marcellus. It will have a capacity of 200,000 bbl/day.

Shell is considering a petrochemical complex in Pennsylvania. If built, the complex would use ethane from the Marcellus.

Now, Odebrecht’s possible ethane cracker could consume even more ethane from the northeast US.

“Are they going to be able to follow through all of this?” Fasullo asked. “Is it going to be a tangible project? There are now a lot of competing outlets for liquids.”

COMING IN 2017
Many of the planned new US cracker projects are are on track for completion by around 2017, several construction companies told ICIS in July.

At least six will likely be completed in around 2017, according to an executive from Fluor, an engineering and construction company. ■


By: Al Greenwood
+1 713 525 2645



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly