Brazil company explores Wood cracker plant
PARKERSBURG, W.Va. -- West Virginia is again in the running for a petrochemical complex. This time around, a Brazilian company, Odebrecht, will look to capitalize on the regional opportunities in the Marcellus and Utica natural gas shale regions.
Gov. Earl Ray Tomblin and Odebrecht officials announced on Thursday in Parkersburg that the company will explore developing a new petrochemical complex in Wood County.
Tomblin called the announcement of the potential complex a "defining moment in the economic development of our state." The complex, which would be known as Ascent -- Appalachian Shale Cracker Enterprise -- would include an ethane cracker plant, three polyethylene plants and associated infrastructure for water treatment and energy co-generation.
Odebrecht officials did not announce financing details or how many potential jobs the project would create or when.
"We realize much work remains to be done," Tomblin said. "However, project Ascent is tremendous news for our state."
Tomblin committed his full efforts and his administration's efforts to completing the deal.
Odebrecht still has yet to purchase land in West Virginia, secure a long-term supply of ethane for its complex or announce how they will finance the project, said West Virginia Department of Commerce Secretary Keith Burdette.
Both Tomblin and Burdette are optimistic about the project becoming a reality in the Mountain State.
"It represents the largest single industrial project in the history of the state of West Virginia if we can make all the pieces come together, and we are confident we can," Burdette said. "It will drive other plants. It will drive manufacturing plants that use their ethane products."
West Virginia officials have recently tried, but have been unsuccessful, in their efforts to attract a multibillion-dollar cracker plant to the Mountain State. Last year, Shell opted to build a plant in southwestern Pennsylvania.
"I don't think these folks would be here today if they didn't have an expanding level of confidence that we can get this done," Burdette said.
Cracker plants break down larger molecules and separate ethane from natural gas. Polyethylene is a byproduct of this process and a base chemical for plastic products manufacturing. Crackers also remove the natural gas liquids, making the natural gas product ready for pipeline transportation.
Company officials said they are going through what is known in the industry as an "FEL" process, or Front End Loading. Officials likened it to a diagnostic check-up.
"Bare with us," said Odebrecht official David Peebles. "The timeframe for us is as soon as possible but we are not going to jump into a pool without knowing how deep the water is."
The three-stage FEL process includes designing, assessing and mitigating infrastructure needs and construction. Odebrecht officials have completed a first stage, but did not detail what that stage entails.
"We decided this makes sense for our company," Peebles said. "We are going to double check."
Peebles added that the company is spending a fair amount of money so far on engineering and legal expenditures. Their next steps will include the permitting process and the purchase of land.
"We have found West Virginia to have a very stable environment," said Odebrecht official Fernando Reis.
The construction of the complex would provide thousands of jobs.
Steve White, director of the Affiliated Construction Trades Foundation, said that his group has been in discussions with the company and believes the project leaders will eventually commit to hiring local, unionized construction workers to build the plant if plans for it are finalized.
"We've talked to them and we feel very positive about it," White said.
Odebrecht has an option to purchase land in Wood County that officials say they will exercise "soon." The land option is located along the Ohio River, where the company SABIC operates a plastics innovation plant.
Burdette said SABIC officials announced Thursday morning the plant would cease operations in the next 18 months. Burdette added that the plant has roughly 109 production plant employees and more than half of them are eligible for retirement. He hopes those workers can find work with the new company.
"Obviously there are a lot of products you can make with ethylene," Burdette said. "They are going to in effect build three different plants for three different product lines and I don't know what they may be."
Burdette added this is not just about one complex or plant but creating a network to capitalizing on regional natural gas developments. While Shell passed up West Virginia for its cracker plant last year, Burdette hopes the latest project is successful.
"The more that we create, we create an energy, a cluster that makes building the network of support around it so much easier and so much more justifiable," Burdette said.
He is hopeful one day the Marcellus and Utica shale regions will have infrastructure capabilities like the Gulf Coast. Then, Burdette said, we could crack natural gas here, consume it here and manufacture products with it here.
Burdette added that state officials have "never gotten down into the weeds" about any other financial assistance, such as tax incentives to make a project for a company like Odebrecht more enticing. He added, though, that financial assistance would be part of the end game.
An Odebrecht-owned company, Braskem, would be responsible for the complex's operation. Braskem has 36 "industrial units," including 29 in Brazil, five in the United States and two in Germany.
"We feel like we found a great partner," Burdette said. "We feel like we found a company to do this in West Virginia and they are going to do state-of-the-art work in this area." Reach Caitlin Cook at email@example.com or 304-348-5113.