Saturday, January 7, 2012

Shell Oil to Announce $2 Billion Ethane Processing Plant in the East -- Implications for the Bakken -- EPP To Build ATEX Express Pipeline


March 14, 2013:  Oil and Gas Journal is reporting:
Enterprise Products Partners LP (EPP) said shipper commitments support development of a 270-mile pipeline header system for delivery of ethane to US Gulf Coast petrochemical plants from the company’s storage complex at Mont Belvieu, Tex.
August 30, 2012: Shell selects Pittsburgh for the new $2 billion ethane cracker unit (see original post). Ohio and West Virginia are miffed.

June 21, 2012: The ethane pipeline from the Hess facility in Tioga to Alberta, Canada, has been approved by North Dakota; it now awaits US State Dept approval.  

January 9, 2011: See comment below regarding another Bakken to Canada pipeline. Note the linked article: the writer calls this a "petrochemical revolution." I have started using the phrase "energy revolution" -- started using it about one month ago.

Same day: It is incredible all the stories out there regarding new pipelines for ethane, polyethylene plants, etc., and how eager communities are to get those industries. It speaks volumes that the present administration has not once said one positive thing about this industry.

I am absolutely convinced that the present administration prolonged the misery of the deepest recession in US history (regional depression in some cases) by bad decisions. To not even include the oil and gas industry in a turnaround plan for the country is beyond ... I can't even think of an adequate word.

I was completely unaware of all these multi-billion dollar projects; not only are they shovel-ready, they require no government money or subsidies, and they provide long-term very high paying jobs. They also require highly educated men and women (engineers, IT folks) which is what the administration is always talking about, while providing hundreds of thousands of blue-collar, and in many cases, union jobs. I am absolutely flabbergasted. And to think someone feels there are no more eye-popping stories to report.

The Keystone XL was just another pipeline in the big scheme of things. Wow. 

See the very long comment dated January 8, 2011, below.

To make it easier to get to the links, I have brought them up here:
Original Post

There's an incredibly good comment over at this post -- the link will take you to the South Heart housing story, but the comment is about the huge natural gas, polyethylene business, natural gas gathering and processing plants that are going up around the US, including in North Dakota.

Shell will announce a $2 billion ethane-to-ethylene plant in the east.
A giant chemical plant that processes natural gas is coming to the Midwest and Ohio leaders hope the state's newly tapped gas deposits, coupled with growing industries that use gas products, make Ohio the favored location.

Shell Chemical is finalizing plans for a $2 billion complex that is expected to create hundreds of jobs and pull other industries and manufacturers into its orbit. Shell has said only that it plans to build in either West Virginia, Pennsylvania or Ohio, three states that overlay ancient shale beds rich in natural gas.

With a site announcement imminent, interest in Shell's decision grows keener by the day. The placement of the mega-refinery, called a cracker, could define where other major oil companies establish operations in the nation's newest energy field. 
I think "Cramer" has talked about the revitalized polyethylene business in the US also (but I forget).

And in the Bakken?
In North Dakota, an ethane pipeline is being built from Hess's expanded Tioga plant into Canada, for processing to polyethylene in Canada. ONEOK is building a natural gas liquids pipeline from near Williston to Kansas. In Kansas, the ethane will be separated from the propane, butane, and pentane fractions, with the ethane than piped to Texas for conversion into polyethylene. Hess's expanded plant in Tioga will be a technically "complete" nat gas processing plant, while ONEOKs will not separate the higher hydrocarbons from each other. 
By the way, the comment also noted that in addition to the giant chemical plant that will be coming to the Midwest (Ohio?), EPP is going to build a 1,230-mile pipeline from Texas to the chemical plant.
The ATEX Express - a 1,230-mile pipeline - will send about 190,000 barrels of ethane daily from the local natural gas producing region to Texas.
As officials from West Virginia, Ohio and Pennsylvania wait to see which state will get Royal Dutch Shell's multibillion-dollar ethane cracker, a pipeline project will soon send ethane produced in those states to the Gulf Coast to be cracked.

Chesapeake, the Upper Ohio Valley's largest active gas driller, will be among the companies sending the ethane south via the Appalachia to Texas pipeline, also known as ATEX Express. The pipeline's owner is Enterprise Products Partners.
With all these pipelines being built across the country, it begs the question: what was it about the Keystone XL that first got folks' attention. Once it became politicized, I understand it; but how did it become politicized in the first place? No wonder TransCanada was taken by surprise. The pipeline was a no-brainer: jobs and money for the states, and pipelines are about as ubiquitous in the US as lawyers.

My hunch is that the Keystone XL was announced just about the time Enbridge had some mainstream press covering some (in retrospect) very minor spills.

On another note, there is clearly an energy revolution in this country occurring on a huge scale, a revolution that is not being reported by the mainstream media.


  1. XL was hated by people who hated oil sand development, because ... well, because....


    The Shell cracker will be huge. It has been a hot topic in WV/OH/PA. WV unions have been making WV seem unappealing by acting like they are owed jobs because, well because...

    Incentive package bids to pay Shell to build it.

    There might be a second cracker, or more.

    They will feed those who use their product. A big effect.

    The pipe to the gulf will be expanded.

    Range has deals to take ethane to Sarnia Canada refineries, and to Philly for export overseas or to the gulf.

    CHK supports all users and says there will be plenty for all. (Huge amounts.)

    Utica, Marcellus, Devonian, maybe more to come.

    A little ethane is a problem. A huge amount is an opportunity.

    CHK and Range have been working on this for years. They have been the key owners of the reserves.

    There may be enough in the US to export massive amounts.

    anon 1

  2. Maybe I've been under the Geico rock, but it certainly seems I've missed a lot of this activity, and it certainly seems the US is on the cusp of a huge energy revolution.

    I find it amazing mainstream media is afraid to talk about it.

    I'm just amazed that a 1,230-mile pipeline is on the drawing boards, and so little press, ... in hindsight -- TransCanada was blindsided -- they had no reason to believe their project wasn't a slam-dunk.

  3. The number of pipelines miles being built is almost staggering:

    Ethane pipeline from Marcellus to Nova in Southern Ontario (requires State Department approval)
    Ethane pipeline from Hess (Tioga) to Alberta, Canada (requires State Department approval)
    NGL pipeline from Williston to Colorado/Kansas (goes over part of Niobrara aquifer in extreme SE Wyoming)

    Liberty pipeline in Marcellus area

    Copano Energy's and Enterprise pipelines in the Eagle Ford
    MarkWest, Atlas Pipeline, and Chesapeake Partners in the Marcellus and Utica
    Seaway Reversal from Cushing to Houston

    The changes coming to Kansas (Mississippian), Colorado (Niobrara) and Ohio (Utica) are further accelerating those trends.

    They all have similar effects:

    drive nat gas energy costs down, increase viablity and competitiveness of US chemical, steel, utility industries, drive energy imports down, drive petrochemical exports up. Yet the State of NY and California - both of which could hugely benefit from shale gas or shale oil in their states - stubbornly refuse to unleash the power of private enterprise in their states.

    The nat gas processing capability being built or recently completed in the Eagle Ford, Marcellus, Utica, Granite Wash, Barnett, Haynesville etc is incredible.

  4. I agree; it is absolutely incredible. I can only imagine how many jobs the industry is providing.

  5. Couple of more stories:

    Youngstown Vindicator: Shell Chemical's plant would be a boon to region

    The numbers, if they turn out to be true, are mind-boggling: An investment of more than $2 billion in the ethane cracker plant; the creation of thousands of jobs tied to the construction and operation of the facility; and, the growth of related industries with price tags in the hundreds of millions of dollars and huge payrolls. It has been estimated that Shell Chemicals’ petrochemical project could ultimately mean a $5 billion windfall. That’s why Ohio, Pennsylvania and West Virginia are locked in an intense battle to win the Shell sweepstakes.

    The American Chemistry Council, in a report last year, estimated the new “petrochemical” could attract up to $16 billion in private investment and create more than 17,000 jobs and billions of dollars in tax revenue for the Marcellus shale region — northern Appalachia.

    --- Once a major ethane cracker complex is established - much of the downstream value chain follows. Which is part of why so much of the chemical industry is located where crackers currently exist: the petrochemical corridor from Houston through Beaumont and on to Baton Rouge.

    Chevron Phillips to build new ethane cracker plant in Baytown, as well as two polyethylene plants

    Chevron Phillips Chemical Co. LP said on Wednesday it plans to build a new ethylene unit at its Baytown facility that will service the shale gas industry.

    The project would be complete in 2017 and employ 400 people, as well as provide 10,000 engineering and construction jobs, according to a news statement.

    Kanawha Valley (Charleston,WV) group seeks to land ethane cracker (non-Shell plant)

    At least two major multinational energy companies are considering multiple sites in West Virginia to put a facility that would use natural gas byproducts extracted from the Marcellus shale for the plastics industry. The Bayer CropScience plant in Institute has been rumored to be among the leaders to land the $2 billion cracker plant.

    Calgary Herald: Alberta on verge of becoming major petrochemical processing location

    Read more:

    And Alberta is again attracting the interest of petrochemical companies seeking both the vast quantities of inexpensive ethane from this gas, and the new supplies of more costly natural gas liquids - butanes, pro-pylenes and propanes - which will be removed from off-gases at the oilsands up-graders in Fort McMurray and shipped south.

    Shelly thinks few people outside the industry realize the significance of the Williams project, which will also include a pipeline tie-in to move the ethane to Dow and the Nova plant at Joffre.

    "It is more important than just the $300-million plant. We are now getting these petro-chemical feeds for various gases. And being able to have a source for the propylenes starts to open doors for us in a whole different petrochemical chain."

    Ethane is turned into ethylene, which is used to create a wide variety of vinyl plastic products (from coatings to plastic bags), while pro-pylenes are turned into polymers, which are used to make everything from plastic parts to rope.

  6. all this processed Natural Gas and NO discussion from the gov. about CNG or LNG powered Vechiles..The problem prone elec is apparently the only alternative according to current administration.. Or does this just indicate the lack of quanitative forward thinking..

  7. I am absolutely convinced that Obama's policies prolonged the misery.

  8. I also read where NOVA out of Canada is planning to build a ethane pipeline from the Bakken up to Canada. This same Canadian article visits the same topic you are talking about as well.

  9. What a great link, thank you.

    If you notice, the writer is calling this a "petrochemical revolution." Again, something that the administration is missing, either on purpose, or out of ignorance.

    I have my hunch that his bureaucracy knows what is going on, but he doesn't want a PowerPoint presentation on "Big Oil."