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Saturday, October 25, 2014

Update On The Proposed $4 Billion Petrochemical Plant Being Talked About For North Dakota -- October 25, 2014

For background to this story, see these two posts:
From a reader:
The Badlands NGLs president was interviewed by the Minneapolis Star-Tribune- about where the [new petrochemical] plant would be located. He stated it would be where mid-stream companies deliver the ethane. He said it may be easier to just build it near an interstate gas pipeline, where the ethane could be separated from the methane. That is the reason that south-central or northeast North Dakota are likely
Only two OneOK plants and Hess are capable of removing the ethane from the gas, and the pipelines are at the point of being saturated with ethane, so for just a safety issue, an ethylene plant is needed to get gas out of ND. 
He also said that is was likely that a polypropylene plant would get built, and a mega refinery would be built near Williston.
This is the link to the story the reader referenced: http://www.startribune.com/business/280361712.html?page=all&prepage=1&c=y#continue.

This is quite a story; much more than just a "where is the new plant going to be built." There is a lot of background information.

[See comment below: the full interview was published in the Minneapolis Star-Tribune a couple of days ago. If i can find it, I will post the link later.]

There are many, many interesting data points in the article; this is one:
North Dakota natural gas contains high levels of ethane, propane and butane — the natural gas liquids — which helps explain the industry’s delay in building the infrastructure, said Justin Kringstad, director of the North Dakota Pipeline Authority.
“The Bakken gas is incredibly rich,” he said. “It’s a very high-density, high BTU gas, so much so that a lot of the plants being constructed here, they’ve taken some very special engineering and expertise to get them to work properly.”
The high-BTU gas is what attracted Bill Gilliam, CEO of Badlands NGL, the firm raising money for a petrochemical plant in northeast, south central or southwest North Dakota. The factory will need ethane, which accounts for up to roughly 6 percent of raw natural gas. By conservative estimates North Dakota is producing enough gas to make 150,000 barrels per day, enough to fill 10 Olympic swimming pools.
Badlands would need about half that much, and would employ 500 people at the plant and at a headquarters in Bismarck. Net job creation would be 2,375 positions, Goenner, the economist, said, based on similar projects. The plant’s plastic beads — created using steam and ethane and high pressure — would travel by train to factories or shipping ports.
Such a plant in North Dakota would enjoy not just an abundance of the necessary raw material — Gilliam believes key pipelines passing through North Dakota are close to taking on dangerous levels of ethane — but also easier shipping to key industrial centers than polyethylene plants on the Gulf of Mexico.
And it continues:
“Let’s look at the markets that actually buy polyethylene in the United States. They’re in the industrial Midwest, which by rail is closer to North Dakota than it is to the Gulf Coast,” Gilliam said.
“Taking finished polyethylene by rail to Vancouver or to Seattle, or even to Duluth on the St. Lawrence Seaway are all things that are easy to do in North Dakota, and easier than going through the Panama Canal.”
The interview can be found at the same source, in the Business section:
I assume these articles will be archived at a later date, retrievable with subscription.

3 comments:

  1. The Star Tribune has a business blog that included the actual interview with Gilliam. Its a two part post that is very informative and was issued a couple of days ago.

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    Replies
    1. Thank you. I found the two-part interview, and posted the links at the bottom of the post above.

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  2. I think it will be built in Colony Wyoming. Go to google earth and look at Colony. You will see a large industrial complex out in the middle of nowhere which has been there for decades. Bentonite is processed there and is shipped to a widespread area by rail that starts there and heads into Nebraska where it ties on to a rail system that meets the requirements stated. Also if you look at a map of OneOK pipeline system you will see a new gas line from the Williston basin heading south along the east side of Wyoming. Even if the pipeline does not have additional capacity to handle the plastics plant there is an existing ROW that could probably handle another pipeline. Hwy 212 running west ties into I-90 in Montana heading east ties into I-90 at Whitewood. Many trucks use that route as a short cut when heading to the west coast. As you travel down 212 towards Belle Fourche you will spot a brand new plastic pipe manufacturing plant that currently imports it's plastic beads, head to Rapid City and there is another new plastic pipe manufacturing plant doing the same. The Black Hills provides a large low cost labor pool to build and run the plant. For instance right now Davis Bacon scale for form builders doing commercial work in Rapid City is $12.15 per hour. The company that built the pipe mfr plant outside of Belle Fourche is from Rapid City. My pick for location of for the new plant will be on the SW side of the Williston Basin and will be in Colony Wyoming. In a state that is very energy friendly throughout the state. Is probably an easier place to permit such a facility and probably is more friendly tax wise.

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