Plant will use Ethane from Natural Gas to Make Consumer and Industrial Plastics

The cutback on flaring the Bakken’s natural gas took another positive step yesterday. A planned plastics manufacturing facility, announced at a press conference in Bismarck, will produce 1.5 million metric tons of polyethylene (3.3 billion pounds annually) from ethane produced in North Dakota. The plant will employ 500 people.

Speaking at the Oct. 13 press conference, North Dakota Agriculture Commissioner Doug Goehring said, “When completed, this project by itself has the potential to reduce most of the flaring of natural gas in our state.”

Bakken Formation MapThe project promoter, Badlands NGL, LLC, said it will take at least three years for full development and will require an investment of $4 billion. The facility will convert ethane gas to both low and high density plastics. Badlands intends to market the majority of the polyethylene products domestically, with additional sales to Asia, South America and Europe, according to a press release.  Project developers say that the plant’s location in North Dakota enables efficient shipping to world markets from ports in the Pacific Northwest and the Atlantic.

Badlands is working with two strategic partners; Madrid-based Tecnicas Reunidas and Vinmar Projects of Houston, Texas. Tecnicas Reunidas, a petrochemicals and polymers contractor, is completing a preliminary engineering analysis for Badlands. This work is scheduled for completion in 2014 and will include technology evaluations, engineering and planning, and final site selection.

Vinmar and Badlands have signed a mutually binding, 15-year memorandum of understanding for 100% of the polyethylene to be produced by the Badlands project.

Badlands CEO Bill Gilliam said North Dakota produces about 200,000 barrels of ethane per day, but the vast majority is sold as pipeline gas. North Dakota ethane produced at Hess Corp.’s natural gas processing plant near Tioga is being shipped via pipeline to Nova Chemicals Corp.’s polyethylene factory in Alberta, Canada, according to a report in the Grand Forks Herald.  The company in charge of manufacturing and marketing will be a publicly-traded master limited partnership headquartered in Bismarck, the report said.

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