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Plastics plant with a cracker near Wheeling to be announced soon

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UPDATED

Houston-based Appalachian Resins is preparing to announce details on its $500 million polyethylene resin production facility south of Wheeling.

"I would hope we will make an announcement regarding the plant site by the end of this month," said CEO James Cutler.

The proposed plant appeared in chemical industry trade journals in a flurry last summer, when Cutler told the industry the privately held company was seeking funding for an integrated ethylene and polyethylene complex in the northeast U.S. — "likely in West Virginia," he said in at least one interview.

The funding appears to have come together.

Appalachian Resins' plant would be very different from the ethane cracker Shell Oil Co. is considering building in western Pennsylvania.

Shell's proposed $3 billion cracker will take ethane, a portion of the natural gas liquids that are produced with gas in the "wet gas" region of the Marcellus Shale, and "crack" it to make as its output ethylene, a plastics feedstock.

Appalachian Resins' proposed plant includes an ethane cracker, but at a much smaller scale and only as an intermediary, integrated step in its process.

The ultimate product of this plant would be polyethylene resins: the HDPE used for grocery and garbage bags, or the LLDPE used to make cling wrap.

"Our proposed facility consists of an ethylene plant producing ethylene for a single downstream polyethylene unit," Cutler said. "Simply, we will have a 500 million-pound-per-year ethylene plant supporting a 500 million-pound-per-year polyethylene production facility."

Shell's plant would use 60,000 to 80,000 barrels per day of ethane, according to information the company put out last year; Appalachian Resins' plant would require 15,000 barrels per day of ethane.

Most polyethylene is made in big facilities in the refinery area of the Gulf Coast and shipped across the country to users. Making it closer to users would give Appalachian Resins an advantage.

"Simplicity and a regional market outlook are the factors that support our business model," Cutler said.

"In addition to good economics, we believe that the Appalachian resins business model — regional sized petrochemical production facilities — supports a resilient supply chain," he added, noting the lesser vulnerability to factors such as weather and terrorism.

A smaller-than-world-scale production facility also provides for operational flexibility, he said, an important factor for a regional polyethylene production facility.

The prospect is a good one for economic development in the region.

"We're talking about upwards of 120 permanent jobs," said Don Rigby, executive director of the Regional Economic Development Partnership, which works in Ohio, Marshall and Wetzel counties. "They would be chemical industry-scale jobs. We don't have numbers on the construction workforce yet but it's a very solid project."

The pursuit of ethane crackers and related downstream manufacturing development continues to be a priority of Governor Tomblin and his administration, said Commerce Secretary Keith Burdette.

Cutler has said he expects construction to begin by the end of this year and polyethylene production to begin in 2015.