Updated: Kasich Says Belmont County Cracker Partnership Pushes Price Tag to $10 Billion
COLUMBUS, Ohio — Gov. John Kasich said a pair of international energy firms now control about 500 acres of property needed to build the planned Belmont County ethane cracker, a project he said could now cost up to $10 billion.
During a Monday news conference at the Ohio Statehouse, Kasich formally announced the partnership between Thailand-based PTT Global Chemical and South Korea’s Daelim Industrial Co., a pairing initially reported by The Intelligencer on Jan. 31.
“It’s great to see these two world-class companies coming together to develop an exciting 21st century industry that will dramatically transform Ohio,” Kasich said. “Building this massive ethane cracker plant here will be a game-changer, not only for Eastern Ohio, but for the entire state, as it will create so many new opportunities for economic development.”
Two-and-a-half years ago, PTT officials joined Kasich at the Statehouse to announce plans to spend $100 million for engineering and design work. Monday, JobsOhio President and Chief Investment Officer John Minor said this investment has already topped $150 million.
Initially, the estimated cost of the cracker plant to be build along the Ohio River was $5.7 billion. Kasich and Minor said Monday the cost could now go as high as $10 billion, as the partnership of PTT and Daelim allows the companies to make the plant even larger than originally planned.
“The investment plans include significantly more ethylene output at a larger facility that would have a greater economic impact throughout the state for decades to come,” Minor said.
Ethane is one of the liquid forms of natural gas prevalent in Marcellus and Utica shale wells. An ethane cracker will take the ethane to “crack” the liquid into ethylene.
Monday, Daelim Petrochemical Division CEO Sean Sang Woo Kim said the Dilles Bottom site offers many advantages, such as proximity to plastics markets in the northeast.
PTT Chief Operating Officer Kongkrapan Intarajang said officials would make use of the local resources, likely powering the giant plant with natural gas. He said the cracker would process about 100,000 barrels of ethane each day.
Kasich emphasized the overall advantages of the Belmont County site, which lies right in the heart of the massive Marcellus and Utica shale play.
“If you’re going to crack gas, you’ve got to have gas,” he said.
Kasich said President Donald Trump’s tariffs on foreign steel and aluminum would likely increase the cost of the Belmont County project, but said he did not believe this would deter investors.
“We hope to have Daelim and PTT reach a final investment decision later this year,” Minor added.
“Today’s announcement is an encouraging step forward for this project, and that’s good news for Ohio families,” Kasich added.
Intarajang said he hopes the Upper Ohio Valley remains patient. After all, nearly three years have passed since the project’s initial announcement, while discussions of such a plant in the region have been ongoing for nearly a decade.
“We are doing our best,” he said. “We have spent $150 million so far.”
In June, PTT paid $13 million to acquire the former R.E. Burger plant site from FirstEnergy Corp. This parcel was about one-third of the area needed for the project. Monday, officials said they had exercised an option to purchase the Ohio-West Virginia Excavating property, which is to the south and west of the R.E. Burger site, though they declined to name the price when asked. In total, officials said they now have about 500 acres needed to build the plant.
One stretch of property not yet under PTT’s control is in Dilles Bottom, where 10 property owners are being represented by attorney Jonathan Turak who said Monday his clients are still waiting to hear from developers with what he terms an “appropriate price” for their land.
Turak said late Monday he is not sure if developers now plan on leaving his clients’ property out of the project, but said no agreement has been reached. PTT spokesman Dan Williamson previously said the company offered more than 125 percent of the appraised value of every property owned by Turak’s clients.