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A Thai and Japanese joint venture could create hundreds of permanent jobs in Ohio

PTT Global Chemical of Thailand and Marubeni Corp. of Japan are considering building a multibillion ethane cracker plant in Belmont County, Ohio. Mark Thomas, a Belmont County commissioner, said the companies plan to spend $150 million for engineering and permits, and then decide in 12 to 16 months whether to move forward with the project.

Appalachian Resins Inc., a Houston company, has leased 50 acres of land in Salem Township to build a 600 million pound per year plant, reports the Columbus Business Journal. When built, the Ohio plant would process about 18 MBOPD of ethane for use in chemicals and plastics.

The project would lead to “several hundred” permanent jobs at the plant and “several thousand” construction jobs, Thomas said. In addition to the jobs created by the ethane cracker, more chemical companies are likely to move operations closer to the new plant, which would likely lead to even greater economic development in the region.

Thomas said it is still too early to put an accurate dollar amount on the project, but that it will likely cost “several billion dollars.”

“We are one step closer to landing a new, multibillion-dollar investment in eastern Ohio, and that’s exciting news for our state,” said Gov. John Kasich in a statement. “There is more work ahead before final decisions on this project are made, but I know our Ohio team will do everything we can to bring it to fruition.”

“While we have not yet made final decisions on this investment, we will continue to work with Gov. Kasich, JobsOhio and all of the local partners in an effort to make our vision a reality,” said Kongkrapan Intarajang, an executive at PTT Global, reports the Columbus Dispatch.

Ethane, a liquid byproduct of natural gas production, has traditionally been rejected by natural gas processors due to its low market value. Infrastructure in the Appalachia region has been playing a constant game of catch-up to meet the booming production of the Marcellus and Utica Shales, and the low-Btu content of ethane has previously made it a low priority. However, a handful of E&Ps and pipeline operators have been adjusting to accommodate the byproduct.

Range Resources (ticker: RRC), for example, has created a market based purely off of its ethane extraction. Contracts are already in place to move a total of 75,000 barrels of ethane per day to three LNG hubs across North America, and two of the projects are currently operational. Once all three are running, RRC will see a 25% cost uplift as compared to selling as a BTU.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.