Update: Odebrecht explores cracker, derivatives complex in West Virginia

From IHS – Chemical Week | November 15, 2013 | Clay Boswell

(This story has been updated to include a statement from Braskem reaffirming its commitment to the Comperj project.)

Odebrecht, the parent of Braskem, is exploring the possibility of building a petrochemical complex in West Virginia, the state’s governor announced in a press release on 14 November. The project, located in the Marcellus shale region of the Northeast United States, would include an ethane cracker, three polyethylene plants, and associated infrastructure for water treatment and energy co-generation.

Odebrecht, a Brazilian engineering and construction firm, would operate the water and electric utilities associated with the complex, which the company calls the Appalachian Shale Cracker Enterprise, or Ascent. Braskem would run the petrochemical operations and market its products.

The news comes within days of a report by a Brazilian newspaper, Valor Economico, that Braskem’s Comperj project has stalled amid concern that it would no longer be competitive, given the cost advantage granted North American producers by the shale gas revolution. According to the report, Petrobras and Braskem have been unable to agree on the price of ethane feedstock.

Braskem has issued a statement reaffirming its commitment to Comperj. “Odebrecht's leadership role will allow Ascent, once its feasibility is confirmed, to be executed by Odebrecht itself," the company says. "This will allow Braskem to continue prioritizing its current projects, the most important of which is the Comperj project in Rio de Janeiro, Brazil. The project will also enable Braskem to benefit from the opportunities provided by competitive shale gas feedstock in the United States. “

Odebrecht is the second company to reveal its interest in setting up an world-scale ethylene plant close to Marcellus shale deposits, which have become a rich source of inexpensive ethane. The first, Shell Chemical, announced in 2011. The company has since chosen a site in Monaca, PA, and begun taking bids for ethane supply.  

Odebrecht has already secured a purchase option on a site in Parkersburg, WV.

 “As the United States’ leader in polypropylene production and with a significant footprint already in the region, we are excited about today’s announcement,” says Fernando Musa, CEO of Braskem America. “Should Ascent materialize, we look forward to serving our clients in the polyethylene market.”

Governor Earl Ray Tomblin notes that the project is only in its early phases. “Although we realize much work remains to be done, this announcement of a potential project is tremendous news for our state and our region,” he says.