CHARLESTON W.Va.- A proposed ethane cracker plant took a step closer to reality Wednesday as Antero Resources announced an agreement to become the primary supplier for the facility Brazil-based Odebrecht hopes to build in Wood County.
The agreement was made public Wednesday in a release by Colorado-based Antero and formally announced that afternoon by Gov. Earl Ray Tomblin during the Marcellus to Manufacturing Ethane Development Conference at the Charleston Civic Center.
The governor said the agreement means the resources being extracted from the Marcellus shale formation beneath West Virginia will benefit the state's residents.
"If we can utilize the ethane produced in West Virginia here at home, we can revitalize our manufacturing industry," he said.
"We recognize there's still work ahead to bring Project Ascent to fruition," Tomblin added. "Today's announcement is an important step forward."
Under the agreement, Antero would provide 30,000 barrels of ethane a day to Ascent, which stands for Appalachian Shale Cracker Enterprise. According to the release, that is almost half the amount required to operate the plant, which will use high-temperature furnaces to convert ethane extracted from natural gas in shale deposits into ethylene, which is made into polymer pellets used as feedstock in the plastics industry.
Securing an anchor ethane provider is "another step in the process, but very fundamental," said David Peebles, vice president of business development for Odebrecht USA. "If you're going to build a fire, you need wood."
Tomblin's announcement preceded a keynote address at the conference by Antero CEO Paul Rady, who was joined on-stage by Peebles. Rady outlined Antero's activities in the region, where it has now shifted its attention.
"We've sold out of Oklahoma and Colorado to be able to focus entirely on the Marcellus and Utica shales," he said.
The company has the mineral rights to several hundred thousand acres of Marcellus shale property in West Virginia, as well as a good chunk of Utica shale territory in southeastern Ohio. Rady said he expects materials from both of those areas to go to the Ascent facility, although the pipelines would likely be built by MarkWest or another party.
"We very much want to support local crackers and the rebirth of the petrochemical and plastic industry" in the region, Rady said.
Last year, Antero tapped into the Ohio River to provide water for its hydraulic fracturing operations through a $525 million, 80-mile pipeline from the Ohio River at Bens Run in Tyler County through Pleasants and into Ritchie County. The company has local offices in Ellenboro and Marietta.
The Ascent project was announced by state officials and Odebrecht in November. In January, the company purchased the proposed site for the plant, the SABIC Innovative Plastics property in Washington, W.Va., for nearly $11 million.
Peebles said Odebrecht is still working through stages to ensure the project is viable, including negotiating the rights to the technology necessary to operate it.
"Until you have that in place and understand what you're going to use, you can't design," he said. "This is going to take us another year, at least."
However, Peebles said there is no question about where the plant would be built.
"Assuming we move forward, it will be in Wood County," he said.
But during his own speech at the conference, Peebles emphasized that capitalizing on the opportunities provided by the resources the shale plays provide is about more than Wood County or even West Virginia. It can benefit - and will require cooperation among - West Virginia, Ohio, Pennsylvania, Kentucky and their leaders.
"We can't be fighting over a single plant or a single deal," Peebles said. "We have to dream big and think practically."