Update On The Proposed $4 Billion Petrochemical Plant For North Dakota -- October 1, 2015; Nameplate Capacity to Increase From 1.5 To 2 Million Tons/Year

Updates

March 3, 2016: update; very extensive update

February 6, 2016: I believe this case is PU-15-788 at the North Dakota Pubilc Utilities Commission site. 
 

Original Post

Oil & Gas Journal is reporting:

• Badlands NGLs LLC, Denver, announced the "CLR deal" September 25, 2015
• neither the value of the contract with CLR nor the volume of ethane committed were disclosed 
• the duration of the supply contract was also not disclosed
• however, Badlands did confirm that it has decided to expand the nameplate production capacity of the PE plant to a proposed 2 million tons/year (original plan: 1.53 million tons/year)
• new capacity based on discussions with North Dakota and Western Canadian NGL-sourced ethane feedstock suppliers
• licensing agreements with key technology partners were signed over the last several weeks
• precise timeline for project's completion not disclosed
• the plant was first announced in an October 13, 2014, press release
• at that time, the company had agreements with two strategic partners for the plant

• Spain's Tecnicas Reunidas SA, Madrid
• Vinmar Projects LLC, a subsidiary of Vinmar International Ltd., Houston

• final site selection was to have been made by end of 2014 
• Badlands has signed a mutually binding, MOU with Vinmar; the latter to take 100% of PE output produced by the proposed project for 15 years
• as of October, 2014, the project required a capital investment of about $4 billion to complete

The poll remains open.

This is an artist's conception of the proposed plant, looking north from Dickinson: Williston would be to the north ("up" in the picture) and Watford City to the east (at the "right side" of the picture). There will be a row of trees planted around the site to help the facility blend in with the rest of North Dakota.

[In the far, upper right corner of the graphic, one can still see the "ball of dust."]

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An Aside

To give one an idea of what a $4 billion petrochemical plant might entail, this is an interesting story over at PennEnergy and Shell's plans for an ethane cracker facility in western Pennsylvania:

Shell Chemicals announced Tuesday that it will pay $69 million to relocate a western Pennsylvania water source that's currently on the site of the company's proposed ethane cracker plant.

The company said it's funding nearly all of the $72 million project in Beaver County, and the Center Township Water Authority will pick up the rest of the tab. The project will replace existing drinking wells and create a new water intake site and treatment facility for the authority.

Shell could end up using the water facilities if it moves forward with a multibillion-dollar petrochemical plant at the former Horsehead Corp. site in Potter Township, but that amount would be less than 10 percent of the total water sold by the system.

Polyethylene Production Plants -- For The Archives

New polyethylene production plant in Mexico.

Braskem-Idesa is building a new integrated polyethylene production plant in Mexico. The project, named Ethylene XXI, will be the largest private petrochemical facility in Mexico.

It is being built in the city of Nanchital in the municipality of Veracruz, in south-east Mexico. It will produce 1.05mt of polyethylene a year from ethane.

Braskem-Idesa is a joint venture between Brazilian petrochemical company Braskem and a Mexican petrochemical group, Grupo Idesa. Braskem and Idesa respectively hold 65% and 35% interest in the joint venture.

The purpose of the project is to reduce the gap between Mexico's local polyethylene production and demands, which are currently being met by importing one million tonnes of polyethylene every year.

Alberta, Canada

Nova Chemicals Corp., Calgary, is nearing completion of a $1.4-billion (US) expansion that will make its Joffre petrochemical site in central Alberta the largest ethylene and polyethylene complex in the world, according to the company.

Once the project's ethylene and polyethylene plants begin operating, Nova Chemicals will become North America's third-largest ethylene producer (7.8 billion lb/year capacity) and fifth-largest polyethylene producer (3.5 billion lb/year).

The largest new facility is a $750-million Ethylene 3 plant (E3), which will be the world's largest ethane cracker (Fig. 1). When E3 comes on stream in August, its annual rated production capacity of 2.81 billion lb of ethylene will complement the 3.4 billion lb from the Ethylene 1 (E1) and Ethylene 2 (E2) plants, which began operating in 1979 and 1984, respectively.

The nearby Polyethylene 2 plant (PE2) will be the world's largest solution polyethylene plant and the first commercial facility to use Nova Chemicals' Advanced Sclairtech, a catalyst and process technology that creates various grades of high-margin products.
The PE2 plant will begin commercial operation in early 2001 and will have an initial annual production capacity of 850 million lb of polyethylene. The existing 16-year-old Polyethylene 1 plant (PE1) produces up to 1.2 billion lb of linear low-density polyethylene.

Petro-Chemical, Fertilizer, Refinery Industries

For archival purposes.

It will be interesting to follow the petro-chemical, fertilizer, refinery industry with the current slump in oil prices and a suggestion that based on supply and demand (not geo-political realities), the slump in oil prices could last a long, long time.

Note, I have tags for "fertilizer" and "refinery" at the bottom of the blog. I will add "Petro_Chemical."

For the archives.

Note how this story dovetails with the proposed Grand Forks fertilizer facility (Don caught this); original estimates of $1.7 billion were recently raised to $1.85 billion. Also note the cost overrun in a fertilizer factory under construction in Iowa.

Bloomberg is reporting on $100/hour welders and the construction of petro-chemical facilities:

A growing surplus of cheap natural gas from shale drilling is driving a boom in the U.S. chemical industry, which uses the fuel as a raw material for plastics, fertilizer and paints.

Plans by chemical companies to build or expand 215 plants worth $133 billion in the U.S., however, are overwhelming the construction work force in the primarily rural areas where they would be located, boosting costs and causing delays.

“We’re all competing for the same limited workforce,” Floren said in an interview. “The only way to address that is train people, which takes time, or bring in foreign workers, which is not allowed.”

Other chemical companies are facing the same issues, Nassef Sawiris, the CEO of OCI NV, said in a joint interview at Bloomberg’s New York headquarters with Floren and Charlie Yao, chief of the Chinese methanol producer Yuhuang Chemical Inc.

“It’s a shocker,” Sawiris said.

OCI, based in Geleen, Netherlands, is already over budget because of labor costs at a nitrogen fertilizer plant under construction in Iowa, according to Sawiris, and he’s having difficulty finding trained construction workers at a methanol facility in Texas that’s expected to open in 2016.

I keep coming back to two things with regard to all this:

• the US is formidable when it comes to energy -- no one else even comes close
• the US has the least expensive coal, natural gas, oil, wind, solar, hydro in the entire world -- and most of it is not subsidized by the government; subject to free-market realities; this will trickle through the entire economy

I track the "Big Stories" here.