The company behind a proposed petrochemical plant in Ohio has announced a deal with a Pennsylvania natural gas supplier. PTT Global Chemical America signed an agreement with Range Resources to provide 15,000 barrels per day of ethane for PTT’s proposed ethane cracker, which it would use to produce the building blocks of plastic.
The deal would provide PTT with less than 20% of the ethane it needs to run the plant, according to Jennifer Van Dinter, chief analyst of natural gas liquids and petrochemicals at S&P Global Platts Analytics. PTT will need more ethane to fuel its 86,000 barrel a day cracker than Range Resources has agreed to provide, or that other producers can currently offer. “So there still is a sizable amount of supply that they still need to identify,” she said.
Platts expects ethane produced in the region to continue to go to Canada, the Gulf Coast, and overseas, as well as to Shell’s ethane cracker when it opens in western Pennsylvania. “There definitely is volume in the region,” Van Dinter said. “But if you really want all of these projects to come to fruition, you will need more production in order to satisfy all of this demand. Otherwise, you know that something’s got to give.”
Increased ethane production, and storage capacity, could help, but Ohio regulators just cancelled permits for the Powhatan Salt Company to drill wells for underground storage of natural gas liquids, at the company’s request. Environmental groups sued the state last month for issuing those permits without the required public comment period.
PTT has yet to reach a final investment decision on whether it will build the ethane cracker, and said the agreement with Range is predicated on that. PTT cited coronavirus in June as the reason it was again delaying a decision on the plant until next year.