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

Update

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:

• Youngstown Vindicator: Shell Chemical's plant would be a boon to region 
• Chevron Phillips to build new ethane cracker plant in Baytown, as well as two polyethylene plants
• Market Watch: Chevron Phillips new ethane cracker plant 

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

• Carper: County will do Anything "Reasonable" to Attract Cracker: it's obvious folks want jobs; and the administration is completely mum on this issue

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

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.