Natural Gas Liquids To Gulf Coast

MOUNDSVILLE – The possibility of an ethane cracker plant in West Virginia appears to be dwindling as more natural gas liquids soon will be piped to the Gulf Coast.

Projected to be in service by late 2015, the Bluegrass Pipeline is a joint venture between Boardwalk Pipeline Partners and Williams Partners, which gathers and processes gas for numerous companies, including Gastar Exploration and Trans Energy. Williams operates several processing facilities in Marshall County, including the Fort Beeler plant along U.S. 250 and the fractionator along the Ohio River south of Moundsville.

“This timely joint venture with Boardwalk would link two liquids-rich resource plays in the Northeast U.S. with the expanding petrochemical industry on the Gulf Coast, providing producers in Ohio, West Virginia and Pennsylvania with the ability to access large and growing markets,” Alan Armstrong, president and chief executive officer of Williams, said. “The large scale solution has many advantages including an early in-service date, lower environmental impact, lower cost and lower permitting risk.”

Natural gas liquids – including ethane, propane and butane – must be stripped away from the dry methane natural gas at processing plants so the methane can be sold by utility companies. Because there is no ethane cracker in the Utica and Marcellus regions, some companies already are shipping the product for cracking at facilities in Canada or along the Gulf Coast. Others are simply burning it off via flaring.

The Bluegrass Pipeline would send 200,000 barrels per day of mixed ethane, propane and butane to the Gulf Coast, with the capacity to eventually be increased to 400,000 barrels per day. Plans call for pipelines that would transport the liquids from producing areas in West Virginia and Ohio to a transmission system in Hardinsburg, Ky., where they then would connect to another transport system to Eunice, La. The proposal also calls for a new processing plant to be built in Louisiana.

The Bluegrass would accompany Chesapeake Energy’s plans to send 75,000 barrels of ethane produced from the Marcellus and Utica shale regions for cracking along the Gulf Coast on the soon-to-open ATEX Express pipeline.

“We are pleased to have formalized this joint venture with Williams to develop an industry solution of connecting prolific Marcellus and Utica liquids production to the markets where these products are in high demand,” said Stan Horton, president and chief executive officer of Boardwalk.

Despite the plans to send large quantities of Upper Ohio Valley ethane to the Gulf Coast, West Virginia Gov. Earl Ray Tomblin and Secretary of Commerce Keith Burdette remain convinced the Mountain State can gain a cracker facility. Once cracked, ethane can be processed into products used in many everyday products, such as clothing, carpet and plastics.

“When you are talking about a $3 billion to $4 billion investment, it takes some time to get everything together,” Tomblin recently said regarding a cracker plant.

Appalachian Resins Chief Executive Officer James Cutler said his company could bring about 125 permanent chemical jobs to Marshall County if he could build a cracker there. Aither Chemicals is another company that is considering an ethane cracker, primarily targeting the Kanawha Valley area.

While speaking in Parkersburg this past week, Burdette said Wood County is in the running to get an ethane cracker, noting that West Virginia is a great place to do business.

“What an incredible opportunity if we can get to the point where we not only extract it in this region, but we produce the feedstock that can drive manufacturing of all sort from plastic bags to carpet,” Burdette said in Parkersburg. “It is a huge job potential. Probably some we have not seen in our adult lifetimes.”

Global oil giant Shell announced plans last year to construct its cracker at a site in Monaca, Pa., but Shell has yet to acquire the land for this facility from Horsehead Corp. This announcement came after months of speculation, as well as effort from development officials in Ohio and West Virginia to attract the large chemical plant.