A new polyethylene (PE) manufacturing facility, with its own "small" ethane cracker is set to open in West Virginia, Appalachian Resins Inc., which will own and operate the $500 million facility, has announced.
Construction on the new plant will begin by the end of this year at an undisclosed location, identified only as south of Wheeling. The plant will have operating capacity to produce 500 million pounds of PE per year, Appalachian Resins (AR) said. The company aims to use natural gas from the Marcellus and Utica Shale as well as its byproduct ethane, which is abundant in the region.
While the details about the construction of the facility are still to be revealed, James Cutler, CEO of AR, explained that the plant will produce high or linear low density PE. Speaking to Plastics News, he said he hoped that products manufactured at the the plant would be on sale in 2015. The facility would require on average of 14,000 barrels of ethane per day. Its relatively small size would provide more flexibility, allowing the site to switch between different grades of HDPE and LLDPE, according to individual customers' needs.
Natural gas extracted from the Marcellus and Utica shale gas fields will be used as feedstock for the facility. Natural gas is processed to ethane, which is then used to produce ethylene monomer and then turned into PE.
Cutler is a familiar face on the U.S. industry scene. He has more than 20 years of experience in the oil and gas and petrochemical industries as a consultant with Houston-based Petral Worldwide Inc. and as an employee of Texaco Inc. and its predecessor, Getty Oil. Back in the 1960s, when the petrochemical industry was still developing and was seen as an extension of the refining industry, petrochemical plants were built in the area of the Gulf Coast, so that feedstock was not transported far. However, with the discovery of large natural deposits across the territory of the United States, new plants should be built to utilize these reserves, Cutler said, explaining the choice of West Virginia as a location.
PE made at the new facility would reach markets within a 500-mile radius, including most of the Midwest, Cutler went on. Having a plant located closer to shale gas fields would provide a transportation advantage, as PE is currently moved across the United States from the Gulf Coast and this means huge freight costs, he added.
Commenting on the size of the proposed plant, Cutler stated that it will not affect yields significantly as small plants do not have more disadvantages than big ones. Cracking ethane results in about 80 percent ethylene, he said. By contrast, when you crack propane you get only 30 percent ethylene and when you crack heavier feeds from crude oil, what you get is mostly co-products, which requires more hardware to handle it, such as bigger furnaces. With heavier feeds, you are actually building a refinery for all practical purposes, but with ethane, practically the only product you make is ethylene, he noted.