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Cracker projects move (or don't) quietly

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Talk of three potential ethane cracker projects has created interest or excitement in parts of West Virginia in recent years.

Last fall, Brazilian company Odebrecht said it is studying whether to build an ethane cracker and related production facilities on a 600-acre site near Parkersburg. That was all the company would say. There was no estimate of when, how many people would work there, or any other details.

The site of the proposed cracker has been occupied by SABIC International Plastics. It produces a material known as ABS (acrylonitrile butadiene styrene). The same day Odebrecht announced its interest in the site, SABIC said it would close its plant in 2015 and lay off all 109 employees. Odebrecht has since purchased the property.

Odebrecht said the complex it is considering would include an ethane cracker, three polyethylene plants and associated infrastructure for water treatment and energy cogeneration. Company and state officials said the next phases of the project are permitting, design, securing a supply of ethane, financing and construction.

But other than that, mum's been the word from Odebrecht lately.

That's also the case with Aither Chemical, a company that said it would build a small-scale cracker in the Kanawha Valley.

Aither did not return a call seeking comment on its plans. Its website has not been updated since mid-2012.

But one site outside West Virginia, in the Pennsylvania community of Monaca, between Weirton and Pittsburgh, continues to move along.

In 2012, Shell Chemical said it was studying whether to build a cracker at Monaca on the site of a zinc smelter owned and operated by Horsehead Corp.

Since then, Shell has bought several extensions of its option to purchase the site, and Horsehead has shut down the smelter.

"As part of the agreement, Horsehead is expected to begin demolition activities at the site in early 2014 at Shell's expense," Shell spokesman Michael Marr said in an email to The State Journal this week. "Shell is continuing its evaluation and has yet to make a final decision to proceed with proposed project. 

"The demolition work is being initiated to begin preparation of the site for potential construction."

Although Shell has not made its final decision, planning work has progressed.

Five companies have committed to or signed agreements to supply Shell with ethane: Consol Energy, Noble Energy, Seneca Resources, Hilcorp Energy and Gulfport Energy.

As to other possible sources of ethane or markets for products the plant will make, Marr wrote, "Ongoing discussions are confidential so we cannot provide an update at this time."

In April 2013, Shell signed an agreement with Williams Partners to create a joint venture called Three Rivers Midstream to gather and process Shell's production in the Marcellus and Utica areas. The venture has plans to build a gas processing plant and related facilities. The joint venture will connect to the Monaca cracker, if built, and the Bluegrass Pipeline system that will deliver Marcellus and Utica liquids to the Gulf Coast and to export markets.

Industry publication Chemical Week reported last fall that Shell has chosen Bechtel Corp. and Linde AG for the front end engineering and design work at Monaca. Marr would not confirm that.

That adds up to a work in progress, but still no announcement of a final decision.

"We will make our final decision when our evaluation is complete," Marr wrote. "Components of the evaluation include: confirming the suitability of the site, securing ethane feedstock supply, completing the engineering and design work, confirming the support of customers for our products, and receiving all the necessary permits.

"At the end of that process and in order for the Project to proceed, Shell would then need to confirm that the Project is economically robust and competitive when judged against other projects within Shell's global portfolio."