WHEELING - A project designed to pump 90,000 barrels of Ohio Valley ethane to the Gulf Coast every day has been canceled.
But a new pipeline that would pump 125,000 barrels of ethane daily from West Virginia, Ohio and Pennsylvania to Mont Belvieu, Texas, is in the works. Commercial operation is set to begin in early 2014.
Still, Mountain State government and industry leaders hope to attract a multi-billion dollar ethane cracker plant to the state.
A Texas company wants to build a pipeline to send 125,000 barrels a day of locally produced ethane for cracking along the Gulf Coast.
"Ethane is a hot commodity," said Corky DeMarco, executive director of the West Virginia Oil and Natural Gas Association.
Without ethane, no cracker plant would come to Ohio or West Virginia. But most industry officials believe the Utica and Marcellus shales beneath these states can produce plenty of ethane to support a cracker - even with large quantities of ethane leaving the area.
Ethane is produced when processing plants strip the natural gas liquids found in "wet" gas away from the methane natural gas. The ethane can then be "cracked" to form ethylene, the basis of plastic. Other liquids found in the region's wet gas include propane, butane and pentane.
Texas-based Enterprise Products Partners L.P. is set to build the planned pipeline. The company has until Nov. 10 to secure proper commitments for construction.
"For more than a year, we have been working with producers in the Marcellus Shale play, and more recently the Utica Shale, to address the growing logistical needs to transport their ethane production and facilitate natural gas production from this liquids-rich region," said A.J. "Jim" Teague, executive vice president and chief operating officer of Enterprise.
"We have also built facilities to serve the petrochemical industry on the Gulf Coast as it continues to expand its use of price-advantaged domestic ethane over more expensive imported crude oil derivatives," he continued. "By providing access to the Gulf Coast petrochemical market, our ethane pipeline offers a timely, cost-effective and expandable solution for meeting the country's long-term needs from both an energy supply and demand perspective."
The northern portion of the proposed system involves construction of a pipeline that would originate in Washington County, Pa. The line would extend west then southwest until reaching Cape Girardeau, Mo. It would interconnect with an existing 16-inch diameter pipeline, which would be reversed to accommodate southbound delivery of ethane to the U.S. Gulf Coast.
The canceled 1,100-mile pipeline, which was to be built by Texas-based El Paso Corp., was to carry locally produced ethane for cracking along the Gulf Coast by late 2014. It would have included 110 miles of new pipeline from around Houston, Pa., to Cambridge, Ohio. It also would have carried ethane from Natrium upon completion of a Dominion fractionation facility in Marshall County.
Due to a lack of supply commitments and/or capital, El Paso spokeswoman Gretchen Krueger said the project is on hold.
DeMarco was not discouraged by cancellation of the El Paso project, noting the development will leave more ethane in West Virginia for cracking.
"We're still right in the running for this thing," he said. "I don't think we have lost any position. I just think people are trying to make decisions."
As pipeline projects come and go, officials with Bayer Corp. believe a plot of land near its New Martinsville facility or its Charleston site would be ideal for a cracker. Several hundred jobs paying about $60,000 a year could result.
Royal Dutch Shell is one firm that announced plans to build a cracker somewhere in Appalachia.
Keith Burdette, West Virginia secretary of commerce said the New Martinsville Bayer site and areas north of New Martinsville along the Ohio River are under consideration, though he declined to be more specific.