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Ethane Production Is Still Climbing

CASEY JUNKINS: Business/Energy Writer: [email protected]

DILLES BOTTOM — U.S. ethane production is growing so fast that federal officials can barely keep track of it, as last year’s projection of 1.4 million barrels per day by 2017 is now trumped by new prognostications of 1.7 million daily barrels by 2018.

As the new U.S. Energy Information Administration numbers indicate, the need for drillers to disperse this liquid continues to climb, which leads Cal Dooley, president and CEO of the Washington, D.C.-based American Chemistry Council, to believe this creates an environment in which the need for ethane crackers grows.

Dooley acknowledged that Royal Dutch Shell cleared its final permit hurdle to begin construction on the Beaver County, Pa. petrochemical complex last week. Also, he and other industry leaders continue awaiting final word on whether Thailand-based PTT Global Chemical will proceed with the firm’s multi-billion-dollar ethane cracker along the Ohio River in Belmont County, which would incorporate the former R.E. Burger plant and adjacent acreage. The company’s decision is expected within about two months.

“We applaud local Pennsylvania officials for their vote of confidence in Shell’s project, which has exciting potential to help make the region a hub of manufacturing activity and job creation,” Dooley said. “Shell’s pioneering project — the first of its kind outside the Gulf Coast — could be the cornerstone for regional economic growth for decades to come.”

According to Dooley, Shell’s complex will use ethane to produce polyethylene, which is used in a variety of products, from food packaging and containers to automotive components.

Meanwhile, Paul Wojciechowski, project director for PTT, has said preliminary plans call 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.

“Thanks to abundant supplies of natural gas, the U.S. chemical industry is investing in new facilities and expanded production capacity, which tends to attract downstream industries that rely on petrochemical products,” Dooley added.

Along with propane, butane and pentane, ethane is one of the liquids prevalent in Marcellus and Utica shale natural gas streams. A certain amount of the substance can be blended into natural gas streams for utility usage, but most companies working in Ohio, West Virginia and Pennsylvania now place the product in pipelines to ship it to petrochemical complexes across the globe for cracking.

Pipelines already sending ethane out of the region include the Sunoco Logistics Mariner East and Mariner West operations, as well as the ATEX Express. Pipeline giant Kinder Morgan is also working on the $500 million Utopia Pipeline, which would send the ethane from Ohio to Michigan for export to Canada.

Some of the domestic ethane even leaves North America via sea vessel from the terminals at Marcus Hook, Pa. and at Morgan’s Point, Texas.

Meanwhile, the Upper Ohio Valley continues waiting PTT’s final decision for Dilles Bottom. In July, FirstEnergy Corp. officials blew up the 854-foot-tall smoke stack at the former R.E. Burger plant along the Ohio River to make room for the giant ethane cracker, which would also incorporate the adjacent Ohio-West Virginia Excavating Co. property to the south and west.

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