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Plans Without Promises: Ethane cracker complex considered in Wood County

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Brazilian company Odebrecht has purchased an option to buy the Sabic plant site in Wood County and build an ethane cracker and related facilities. Brazilian company Odebrecht has purchased an option to buy the Sabic plant site in Wood County and build an ethane cracker and related facilities.
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Gov. Earl Ray Tomblin had two very different jobs announcements last week.

On Nov. 12, he was at a factory in Wayne County to announce an expansion of a defined amount within a specific time frame: $20 million, about a year and an estimated 250 new jobs.

Two days later, he stood in a building on the campus of West Virginia University at Parkersburg to say an ethane cracker and related industries might locate in Wood County sometime in the future. 

Neither he nor the company representatives at his side would say when the plant would be built, what the investment would be or how many jobs would be created.

What went unsaid was the cracker would be built on the site of an existing factory and that morning the existing factory notified its 109 employees they each would be out of a job in about 18 months.

It was a game of managing expectations. Seeing what Shell Chemical has gone through in western Pennsylvania, neither Tomblin nor the representatives of Ascent (Appalachian Shale Cracker Enterprise) wanted to be tied down to specifics.

But they did hold out hope that good things are coming.

The announcement

A nearly full slate of local elected officials and businesspeople gathered at WVU-P the afternoon of Nov. 14 to hear an announcement of something that many of them knew had in the works for about two years.

Odebrecht, a Brazilian company that deals primarily in chemicals, will explore the development of a petrochemical complex at the Wood County community of Washington, about seven miles west of downtown Parkersburg along the Ohio River. The complex would be built by a company called Ascent, a joint venture of Odebrecht and Braskem, another Brazil-based company. The complex would include an ethane cracker, three polyethylene plants and associated infrastructure for water treatment and energy cogeneration.

Odebrecht has already secured an option to purchase the site.

"Literally, from the first day of my administration, I have made it a priority to take advantage of the vast resources of the Marcellus and the Utica shale gas reserves, to do more than to just extract them and ship them out somewhere else, but to create manufacturing jobs here in the Mountain State," Tomblin said at the announcement. "For the past two years, I have worked with my team from the Development Office on Project Ascent, including diligent evaluation of each potential site. 

"Wood County provides a unique opportunity to construct a cracker that maximizes the downstream, value-added benefits of the abundant Marcellus and Utica shale reserves right here in West Virginia, Pennsylvania and Ohio."

Neither Tomblin nor David Peeples, vice president of business development for Odebrecht, nor Fernando Reis, CEO of Odebrecht subsidiary Odebrecht Environmental, would commit to, estimate or speculate on details of the development that are normal with such announcements.

"We do not want to give a specific date for a groundbreaking," Peeples said.

Work ahead

After the official announcement, Keith Burdette, West Virginia secretary of commerce, filled in some of the announcement's gaps about the project to date as well as the next steps.

Burdette said the state has been working on this project for about two years. The announcement was made Nov. 14 because the project could no longer be kept secret, although it had been something of an open secret in the Parkersburg area, he said.

"There's a lot of public steps that start to take place," he said. "They will begin a permitting process. That becomes public. They have options on the property. Once they close that, that becomes very public."

Burdette said the governor told him he would not have been at the announcement if he was not confident the plant would be built.

"We've still got a lot of work to do, but we're feeling very confident," Burdette said.

The next phases are permitting, design, securing a supply of ethane, financing and construction, he said. Tomblin said planning work for a pipeline to supply the complex ethane is part of the next phase of development.

Among other things, Ascent needs to ensure it has a long-term supply of ethane available, Burdette said.

 "We're still talking from today to the start of production several years. We've still got a lot of work to do," Burdette said. "They've been very thorough, and they've been very cautious. I don't think these folks would be here today if they didn't have an expanding level of confidence that we can get this done."

As for incentives the state is offering, that topic is still under discussion, Burdette said.

"The really impressive thing about today's announcement is that we've really not got to that," he said. "They're making this announcement based on what they need and what they know."

Burdette said the state and Ascent have talked about tax laws, but "we've never gotten down into the weeds about any other assistance they may have. 

"Will we have to go to the Legislature? Probably so," Burdette said. "But today's announcement isn't about that. They've made the decision without all of that."

More than a cracker

"Our next mission, literally, is to close this deal, get it to construction, and then attract the companies that will use what they produce to make other goods and services," Burdette said.

That part is what makes this project so important to the state, he said.

"It represents the largest single industrial project in the history of the state of West Virginia," he said. "If we can make all the pieces come together … it will mean not just a plant, but it will drive other plants. … It will drive other manufacturing plants that use their end product to create consumer products."

After the cracker converts ethane to polytethylene, Ascent or other companies can use it to make other products, such as plastic food containers, plastic sheeting, plastic bags and toys, Burdette said. The industries that grow up around the Ascent complex or as a result of it could produce enormous benefit for the state, he said.

"We want value-added development in this state, so we're encouraging the producers to recognize projects like this — this isn't the only one — and to be supportive," he said. "We're continuing to talk to other companies that are talking about the same type of development. 

"We want them to succeed. … The more we create, we create a network of support around it that make it so much easier and so much more justifiable."

Burdette said similar plants are considered "plug and play" in the Gulf Coast.

"They have multiple crackers. They have a huge infrastructure in pipelines," he said. "We don't have any of that, so we've got to find a way to encourage that here, and if we do this right, this will impact our economy for a half century or longer." 

Short-term concern

The fact that Odebrecht chose the site of an existing, operating manufacturing operation meant something had to give. A few hours before Tomblin and others make the official announcement that Ascent could be coming to Wood County, Sabic notified its 109 employees that its plant at Washington would cease production in about 18 months.

Parkersburg Mayor Bob Newell said the city doesn't want to see Sabic close.

"There's always concern when someone loses their job, it will affect the city some," Newell said. "Obviously, some of the workers will live in the city.many won't. Some may live in Ohio. We depend on the entire region to survive."

But Newell called the cracker plant announcement "a silver lining."

"Of course, that's a few years out at best," he said. "They'd have to build it first. I suspect it will take several years to build a $4 billion facility, so those permanent jobs, the people that will actually be working on the plant, that's out there in the future. 

"In the meantime there'd be thousands of construction jobs."

Sabic (Saudi Basic Industries Corp.) had acquired the plant last year when it purchased the plastics division of General Electric Co. Sabic said it would transfer production of ABS (acrylonitrile butadiene styrene) to factories in Illinois and Mississippi. Sabic said it expects its Wood County employees to continue to work at the current site until the plant shuts down.

Burdette said more than half of Sabic's employees are eligible to retire.

"Hopefully some of those folks will come to work with this plant," he said.

Staff Reporter Linda Harris contributed to this report.

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