Appalachian Basin

Kasich: $10 Billion Ethane Cracker Will Jumpstart ‘A New Dimension of Ohio’s Economy’

Ohio Gov. John Kasich announced this week that the investment to build a world-class shale-powered petrochemical complex in Ohio could now jump to as much as $10 billion and would be a “home run” for the region. While a final investment decision has not yet been made by Thailand-based PTT Global Chemical and its new partner, South Korea’s Daelim Industrial Co., Ohio’s governor said he is “more optimistic” that the final investment is coming in a “relatively short period of time.” The fact that PTT has already spent $100M on the project and has exercised an option to buy an additional 300 acres gives every indication Kasich’s optimism is justified. What’s more is that Ohio’s top elected official said the ethane cracker will change the very fabric of Ohio’s economy, even comparing the investment to Amazon and Facebook.  At a recent press conference Kasich said,

“It will create a whole new dimension, a whole new economy in the state of Ohio. Because with the development of a facility like this… the first thing you think about is the development of the plastics industry and the ability to change the very fabric. These are industries that the Midwest has never seen.”

Kasich is absolutely right. This project is not only a shot in the arm for an area of the country that’s long been forgotten, it will likely change the “fabric” of Ohio’s economy for years to come.  The prolific natural gas and natural gas liquids found in Ohio, Pennsylvania, and West Virginia are enticing investments from all over the world, such as the partnership with the Thailand-based PTT Global Chemical and South Korea’s Daelim Industrial Co., and the recent final investment decision made by Royal Dutch Shell cracker facility in Pennsylvania. These investments will be an economic catalyst, not just for Ohio, but for multiple states that share the Ohio River. Shale-drive economics leading to petrochemical investments are transformational and region-changing.  Gov. Kasich summed it up this way,

“It’s great to see these two world-class companies coming together to develop an exciting 21st century industry that will dramatically transform Ohio. Building this massive ethane cracker plant here will be a game-changer, not only for Eastern Ohio, but for the entire state, as it will create so many new opportunities for economic development. …. I am extremely hopeful within a relatively short period of time that we will have a final announcement and we will get moving on this and at that point in time we will recruit businesses from all over the world to come and be a part of this and we will include our friends in West Virginia, Kentucky, Pennsylvania, it’s going to be really cool.”

So cool in fact, that EID has identified that the region could become a Silicon Valley of shale, creating an energy infrastructure nerve center capable of catapulting a manufacturing renaissance that will thrive with locally produced Marcellus and Utica natural gas. During his press conference, Kasich alluded to this same ideology in comparing the petrochemical investment as a monumental change agent for Ohio, similar to other noteworthy investments in the state, such as Facebook’s new data center outside of Columbus.

“We’re not just interested in this; we’re interested in building an entirely new community of technology. When you get Amazon cloud computing, it’s a change, when you see an investment in Facebook, it’s a change. These are industries that the Midwest has never seen, and that’s what’s so exciting about this.”

1 Comment
  • Tom Pendergast
    Posted at 20:40h, 18 March Reply

    On December 20, 2017, the Department of Energy released a primer on Appalachian NGLs. It was published to educate the public and enhance discussion regarding NGL resources and related infrastructure in the Appalachian region. The DoE primer will be especially useful for educators, banks and economic development entities.

    The tri-state area produces more NGLs than any other region in the world. This region exports 100% of its NGLs to: Ontario, Texas, Kentucky, Brazil, Scotland, Norway, Sweden, England, Austria and, beginning in 2019, China.

    Ethane is the most important constituent of the NGLs because it is the precursor for polyethylene, the most common plastic. 70% of polyethylene consumers in the United States are within a 700-mile radius of the upper Ohio Valley; and most of those are west of the Ohio River.

    In recognition of this, five companies have decided to expand their polyethylene-production capacity close to this abundant and economical resource:

    1. Westlake Chemical, Calvert City, Kentucky (switched from propane feedstock to 100% ethane and, as a result, increased capacity (propane feedstock yields 45% ethylene whereas ethane feedstock yields 80% ethylene)

    2. Nova Chemical, Coruna, Ontario doubled capacity using 100% Ohio-sourced (Antero Resources) ethane; the largest single FDI (Nova is an Abu Dhabi company) in Ontario’s history

    3. Imperial Oil Products and Chemicals, Sarnia, Ontario. Sourced from Antero Resources (the largest American NGL producer), Range Resources and EQT (America’s largest natural gas producer).

    4. Shell Chemical Appalachia’s $6 billion ethylene plant, the largest FDI in the history of Pennsylvania

    5. PTT Global Chemical was planning to build a $6 billion ethylene plant in Belmont County but is likely to increase this to $10 billion. An FDI is expected around the end of 2018. It will become the largest FDI (PTT is Thai) in Ohio’s history.


    As I read through the DoE primer, I kept high-school and college students particularly in mind. They will be the source of talent needed by industries that are attracted to our region because of our proximity to a world-class polyolefin resource and a concentrated market of consumers in the U.S. and Canada.

    Clearly, STEM subjects will be in high demand. Career counsellors must be especially alert. They need to know what companies in Ohio are using polyethylene and focus on the skill sets these companies will be seeking. Likewise for teachers of chemistry, physics and supporting subjects such as math, finance (including distributed ledger technology), business, communications, graphic arts, etc.

    Economic development agencies have a unique opportunity to attract companies that use polyolefins and be close to customers in the U.S. and Canada. I can think of no region that is so blessed: Not the Middle East, not Europe, not Russia and not China. And Qatar, the UAE, Saudi Arabia and China have all expressed interest in U.S. investments often centering on ethane.

    I will be interested in learning of how schools and development agencies take advantage of the DoE’s wonderful primer to educate their constituencies and enhance discussions on our NGL resources in the upper Ohio Valley.

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