JACKSON TWP. — Ohio, western Pennsylvania and West Virginia are likely to see three or four multi-billion dollar plants built to turn ethane from the Utica Shale into ethylene, a key ingredient for making plastics.
That analysis came from Tom Gellrich of TopLine Analytics, a Philadelphia company that closely follows ethane markets, at Tuesday’s Utica Summit III that drew 125 people to Kent State University’s Stark Campus.
Gellrich said he is confident that three or four of the so-called cracker plants will be proceeding forward in the Appalachian Basin by 2020.
Royal Dutch Shell may be the company farthest along in developing a chemical plant to turn liquid ethane from the Utica Shale into ethylene, he said.
That plant, with a $4 billion price tag, would be west of Pittsburgh on the Ohio River in Beaver County. The company has not yet committed to building the plant, although it is the cracker plant that is most likely to be built, he said.
Shell likely will make its final decision in the next 24 months, he said, and the plant could be running within five years or so.
A Thai company, PTT Global Chemical, is looking at building a similar $5.7 billion cracker plant in Ohio’s Belmont County.
Braskem/Odebrecht, two Brazilian companies, are looking at a site near Parkersburg, W.Va., although that proposal has run into problems.
A Texas-based company, Appalachian Resins, had been looking at a small cracker plant in Ohio’s Monroe County, but those plans are now on hold.
Other companies including foreign-based firms may yet get involved in cracker proposals, he said.
Cracker plants are very desirable because they create hundreds of construction jobs, will create permanent jobs and will attract chemical plants and other companies to locate nearby.
At present, ethane from the Utica and Marcellus shales is piped to the Gulf Coast for processing. That material is then returned to Northeast Ohio as ethylene used to make polyethylenes and other plastics, Gellrich said.
Northeast Ohio, not the Gulf Coast, is the center of the plastics processing industry and that industry will be taking off in the next 24 months as the flow of polyethylene grows, he predicted. That will accelerate as the price of plastics starts to drop, he said.
Consumers will start seeing the change to shale-produced plastics, he said.
That will include glass and cans in grocery stores being replaced by new plastics and wood in building decks, floors and counters being replaced by plastic woods and laminates, he said.
Ohio is likely to see new plants to produce farm fertilizers using chemicals produced from natural gas, he said.
The United States, he said, is at the tipping point for what he called the shale natural gas revolution. “This is enormous,” he said. Shale natural gas will provide a major boost to America’s plastics and chemical industries. It will also fuel a new boom in American manufacturing with its cheap energy, he said.
Ohio’s Utica Shale is poised to become a global energy market and international investments in the Utica Shale are growing, said Frederick Shepperd of the Swiss-based Shepperd Investors AG.
In the next 20 to 50 years, eastern Ohio will surpass Chicago and Texas as industrial centers and will rival Dubai in the United Arab Emirates, Doha in Qatar, Baku in Azerbaijan and Astana and Atmatu in Kazakhstan, he predicted.
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