A partnership between Thailand’s largest chemical company and a Japanese trading and investment house is shopping the region for an ethane cracker site.
Allenport’s Mon River Industrial Park in Washington County is one of three locations being evaluated by the group, which joins Bangkok-based PTT Global Chemical and Tokyo-based Marubeni Corp.
This is the third potential cracker project seriously considering the Appalachian region to capitalize on the supply of natural gas liquids, specifically ethane, that are abundant in parts of the Marcellus and Utica shale formations.
Royal Dutch Shell was the first company to announce it is evaluating the Horsehead Corp. complex in Potter Township, Beaver County, for a world-scale ethane cracker. The multibillion-dollar plant would convert ethane into ethylene, a feedstock for the petrochemical industry.
And last year, Brazilian company Odebrecht Organization said it had chosen Parkersburg, W.Va., to study as a site for its proposed Appalachian cracker facility, dubbed Project Ascent.
Both companies are still evaluating and haven't yet made their final decisions to build.
Shell’s spokeswoman Kim Wyndon said it’s too early in everyone’s evaluation process to speculate what impact three crackers would have on the region, if all are indeed built. She could only speak for Shell's motivation for choosing an Appalachian site.
“The supply was there and we knew we would have the workforce capabilities that were needed,” she said.
Odebrecht’s David Peebles, who is vice president of Ascent, said the addition of a third cracker project would start to create a concentration of ethane plants in the region and help drive a manufacturing renaissance here.
“This is like the Sillicon Valley for the polymer industry,” he said.
Sources familiar with the PTT-Marubeni effort, who requested to remain anonymous, confirmed the group has been looking at the Tri-State area for the better part of a year.
The evaluation process has clued in state and local economic development officials, as well as the environmental regulators and transportation interests, they said
Aside from Allenport, a site in West Virginia and another in Ohio are on the table for the PTT-Marubeni project, sources said. The three states have competed fiercely for the other two major cracker projects.
The 400-acre Allenport location is the former home of Wheeling Pittsburgh Steel. It has 16 buildings once used in manufacturing and for warehousing, and barge and rail access. In 2012, the industrial park was designated a Keystone Opportunity Expansion Zone, a state classification that grants companies that locate there tax exemptions and abatement for 10 years.
Joel Kreider, a director with real estate firm Newmark Grubb Knight Frank who represents the property, declined to comment.
PTT Global Chemical’s outgoing president and CEO Bowon Vongsinudom told Chemical Week magazine in July that his company was in discussions about a U.S. cracker and resins project that would use Marcellus Shale gas as a feedstock.
With revenue of $17.7 billion during the past fiscal year, PTT is on a growth path. While only about 2 percent of its sales came from the U.S. last year, Mr. Vongsinudom told the trade publication that the firm wants to have a strong manufacturing base outside of Thailand and is looking at the United States as a target for expansion.
For its part, Marubeni already is active in North America and has a stake in several U.S. shale plays through joint venture partnerships in the Niobrara and the Eagle Ford shales.
Energy is a growing part of the Japanese company’s revenue stream. In 2013, energy accounted for 27 percent of Marubeni’s revenue, a close second to the company’s largest money maker, agriculture.
PTT and Marubeni already are working together in Asia. The duo signed an agreement last year to jointly develop new power plant projects in Thailand and neighboring countries.
Anya Litvak: email@example.com or 412-263-1455.