NEW MARTINSVILLE - West Virginia and Ohio may have lost out on Royal Dutch Shell's multibillion-dollar ethane cracker, but Aither Chemicals is making progress in bringing at least one petrochemical facility to the Mountain State.
Last week, West Virginia-based Aither entered into an agreement with Bayer Corp. to "determine the market interest for chemicals and plastics" for an ethane cracker that would be built in the Charleston area. Bayer owns land in Institute, W.Va. (near Charleston) in addition to the New Martinsville plant, but Aither spokesman Jason Keeling said the agreement does not mean the plant will be built on Bayer's Institute site.
Though not on the massive scale of the Shell project - for which progress at the Monaca, Pa. site continues - Keeling said an average-sized Aither cracker would still generate about 2,000 construction jobs, about 200 direct jobs once the plant is up and running, and at least 1,000 related permanent jobs, said Keeling.
Although officials in West Virginia and Ohio tried to land a Royal Dutch Shell ethane cracker, Shell officials eventually announced the plant will go to Monaca, Pa. Now West Virginia-based Aither Chemicals is making plans for a $750 million ethane cracker.
"We are still evaluating multiple sites throughout the Kanawha Valley and the entire region. This agreement in no way precludes us from building in Northern West Virginia," said Keeling.
When asked why Aither is planning its cracker for ethane-deficient Charleston instead of the ethane-rich Northern Panhandle, Keeling emphasized that "both areas are very attractive and viable."
"We can build multiple crackers," he said. "Our technology allows us to build facilities that are physically smaller than something like what others may be building."
The agreement features an "open season" that will run through July 20, as Aither and Bayer will work during the interim period to determine the market interest for the chemicals and plastics that would be produced by such a cracker. The products could include not only ethylene, the basis for the plastics industry, but also acetic acid and other marketable items.
"Bayer is a potential buyer of some of the materials Aither would produce," Keeling said.
Bayer officials declined to comment for this story.
After July 20, Aither Chemicals will evaluate the market's response and decide on next steps by August 31. If Aither decides to proceed with the proposed cracker for the Kanawha Valley, production could begin as early 2015.
Natural gas processing companies like Williams Partners (Caiman Energy), MarkWest Liberty and Dominion Resources strip the ethane, propane, butane and pentane away from the dry methane part of the natural gas stream so that all the products can be sold individually. After the ethane is separated from the other substances, it must be shipped to a cracker or placed into a pipeline.
Some companies are in the process of sending local ethane to Texas or Canada in pipelines, at least partially because there is no cracker in the Marcellus and Utica shale region now.
Attracting a new ethane cracker to West Virginia would only be one aspect to bringing a new stream of industries to create thousands of new jobs, according to those in the natural gas and chemical industries. Plants to convert the materials produced at the cracker and businesses that would rely on those materials could help West Virginia and neighboring states create thousands of high-paying jobs over the next several years, officials believe.
Joe Eddy, chairman of the West Virginia Manufacturers Association, as well as president and chief executive officer of Eagle Manufacturing in Wellsburg, previously explained the job stream associated with an ethane cracker like this:
-- companies like Gastar Exploration, Chesapeake Energy, Chevron, XTO or others can produce the natural gas and ethane;
-- firms like Williams (Caiman), Dominion and MarkWest would separate the natural gas liquids (ethane, propane, butane and pentane) from the methane and fractionate the ethane from the other liquids;
-- companies like Shell, Aither, or whoever would build the cracker would transform the ethane into ethylene;
-- those same companies who build the cracker - or other firms - could operate the plants to further process the ethylene into polyethylene; and
-- companies like Eddy's Eagle Manufacturing would take the polyethylene and turn it into plastic pipe, plastic containers, toys, etc.
Many months of speculation about Shell's ethane cracker - for which elected officials in West Virginia, Ohio and Pennsylvania vowed to provide a myriad of tax incentives to Shell in order to entice the company to build in their particular states - ended in March when Shell announced it would build north of Pittsburgh. Officials started immediately casting blame for failing to gain the massive petrochemical plant, pointing to everything from union activities to a casino that did not want to move to accommodate Shell's facility.