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Local officials still optimistic for ethane cracker

By Casey Junkins

The Intelligencer
DILLES BOTTOM, Ohio — It took Royal Dutch Shell officials five years from announcing in 2011 their intentions to build a Marcellus Shale region ethane cracker to confirming they would construct the giant petrochemical plant along the Ohio River in Beaver County, Pa.

This means PTT Global Chemical America officials would take only about half that much time to commit to building their multi-billion-dollar facility at Dilles Bottom if the Thailand-based firm makes its final investment decision by the end of 2017. PTT Global Chemical officials and Ohio Gov. John Kasich announced the proposed plant in April 2015.

“This shows me they are doing their homework. There is nothing whatsoever to show me that this deal is dead,”Shadyside Local Schools Superintendent John Haswell said in reacting to the Tuesday announcement that PTT will wait until the end of the year to make a final decision instead of March, as previously announced.

“It’s good that they didn’t just say no,” Wheeling-based financial adviser Peter Holloway added. “The fact that they didn’t say no, to me, suggests they are going to be working on it with the potential builders.”

PTT spokesman Dan Williamson said the two contractors working on plans to build the petrochemical plant are Irving, Texas-based Fluor Corp. and San Francisco-based Bechtel Group Inc. Both companies’ websites feature examples of their work on similar projects involving the petrochemical industry.

“The adjusted timeline will put PTTGC America in a stronger position to make its decision on the engineering design and the economic feasibility of this project,” said David Mustine, who serves as senior adviser for JobsOhio, the state’s private economic development corporation. “There has been exceptional collaboration with a wide range of stakeholders to support PTTGC America’s continued progress in Belmont County, including revitalization and remediation of the site.”

“The state of Ohio, JobsOhio, Belmont County, Mead Township and all elected officials have been extremely supportive to date, and we hope their strong support will continue,” PTT spokesman Dan Williamson added.

Williamson also made it clear that if PTT builds an ethane cracker in the U.S., it will be in Belmont County.

“Absolutely not,” he said when asked if the company was considering other potential development areas. “This is the site we are considering for a petrochemical complex in the U.S.”

Project Overview

Powered by continuous production increases in the Marcellus and Utica shale region, the U.S. continues producing more ethane, which is one of the liquid forms of natural gas drawn from wells throughout Ohio, West Virginia and Pennsylvania. Because there is still no ethane cracker in the region, most producers send ethane out of the region for processing via pipeline at crackers in Canada, Europe or along the U.S. Gulf Coast.

Many in the industry believes having a cracker plant in the region would be mutually beneficial because the producers would not have to pay to ship their ethane across long distances, while the company operating the cracker would have a steady supply of feedstock for its operation.

Officials also believe there will be more than enough ethane in the Marcellus and Utica region to support more than one cracker plant, while PTT leaders have said Shell’s decision to build in Pennsylvania will not impact their plans at Dilles Bottom.

PTT Project Director Paul Wojciechowski has said preliminary plans called for having infrastructure onsite that would “crack” the ethane into ethylene. He said additional infrastructure at the Dilles Bottom site would then transform some of this material into ethylene glycol for antifreeze, while even more onsite machinery would turn the rest of the ethylene into polyethylene for making plastic goods.

Officials estimate building such a massive complex would generate thousands of construction jobs, as well as hundreds of permanent jobs once the plant enters operation. Hundreds or even thousands of “spin-off” jobs could also result from the ethane cracker’s presence, officials have said.

Site Preparation

The development could take up more than 400 acres between the Ohio River and Ohio 7 in Dilles Bottom area of Belmont County, with a substantial portion of this being the Ohio-West Virginia Excavating property and the remaining parcel consisting of the former FirstEnergy Corp. R.E. Burger plant property.

Last year, a crowd gathered to watch the 854-foot-tall smoke stack fall at the Burger plant. Since then, FirstEnergy contractors have worked to clear and fill the property for potential sale to PTT.

“The Ohio Environmental Protection Agency reviewed all our site activities and issued a letter indicating that Burger had successfully completed environmental remediation in December,” FirstEnergy spokeswoman Jennifer Young said Friday. “As part of environmental remediation, we completed soil testing to confirm that no unexpected materials were present in the ground anywhere at the Burger site. By far the largest remediation effort involved proper disposal of asbestos and lead paint in the buildings, which was done prior to their demolition.”

Young also said FirstEnergy has an exclusive sales agreement in place with PTT, so the electricity company is “not seeking other buyers” for the land.

PTT officials have also received water discharge permits from the Ohio Environmental Protection Agency.

Tax Incentives and Shadyside Schools

Haswell said no one from PTT or JobsOhio has contacted school officials about a potential property tax break. That is good, he said, because the Ohio Department of Education has placed the district in “fiscal caution.”

“We have been in fiscal caution for over a decade. We don’t have the ability to give away the farm,” Haswell said in terms of property taxes. “They know what type of shape our school is in. We have been operating on life support, more or less.”

JobsOhio spokesman Matt Englehart said any assistance from his corporation or from Ohio taxpayers would be “made public after programs are approved and agreements are executed.”

To this point, more than $17 million worth of funds derived from Ohio liquor sales have been used to help FirstEnergy with site remediation.

Although Haswell said plenty of questions remain, he believes the project would greatly benefit his school district, as well as the entire Upper Ohio Valley.

“We have a lot more possibilities with them than we have without them,” Haswell said. “They have told us they want to be good neighbors. We want to partner with them to make the Shadyside Local School District a beacon for Ohio.”

In the meantime, however, Haswell, Belmont County commissioners, state of Ohio officials, and Ohio Valley residents will have to wait to see it the enormous ethane cracker comes to fruition.

“The team at PTTGC America continues to work around the clock, investing their time, talent and resources in hopes of making it happen, which demonstrates the company’s significant commitment to move the project forward,”Mustine said.


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