Project remains priority for PTTDLM partnership
DILLES BOTTOM — The developers of a proposed petrochemical complex in Belmont County say they remain committed to the project in response to reports that the COVID-19 outbreak may interfere with construction of the plant.
“Despite the COVID-19 pandemic, a world-scale petrochemical complex in Ohio remains a top priority for the PTTGC America-Daelim Chemical USA partnership,” spokesman Dan WIlliamson said in a news release Friday. “While there are factors resulting from this health crisis that have kept us from acting as quickly as we would like, we continue to move as quickly as we can.”
Some area residents and environmental organizations oppose the potential ethane cracker, saying it poses serious threats to local air and water quality and to the health of residents. Representatives of FreshWater Accountability Project, Fractracker Alliance, Ohio Valley Environmental Coalition, Concerned Ohio River Residents and Students for Energy Justice recently reported that the final investment decision on the project was being delayed, based on a report earlier this month by S&P Global.
The groups also write a letter to David Solomon of the New York financial firm Goldman Sachs, urging that the West Street Energy Partners LP private equity fund terminate its development agreement with the Mountaineer NGL Storage Project, which would be constructed near the cracker plant and used for ethane storage.
“As you may be aware, the feasibility of the Mountaineer Storage project is contingent on the construction of a proposed ethylene cracker plant in Belmont County, Ohio, which is supported by PTT Global Chemical and Daelim Chemical,” they wrote. “However, in recent weeks a consensus has emerged among both rating agencies (Moody’s and Fitch Ratings) and industry analysts (IHS Markit and the Institute for Energy Economics and Financial Analysis) that under foreseeable market conditions the cracker plant is too risky a proposition to warrant investment.”
They maintain that the price of polyethylene, the proposed cracker’s principal product, has plunged to record lows; that the market for polyethylene has entered a period of sustained oversupply’ that competition in the plastics market is growing as major oil companies compensate for stagnant growth in fuel markets by competing more aggressively in petrochemicals; that growth in the demand for plastics is expected to slow as policies to counteract climate change expand; and that there is widespread uncertainty about how soon economic recovery from the COVID-19 pandemic will begin, how robust it will be, and what it long-term effect on the plastics and petrochemical markets will be.
But PTT/DLM continue to take steps toward a final investment decision. The companies have spent hundreds of millions of dollars to acquire and prepare more than 500 acres of property along the Ohio River south of Shadyside, at the former site of the FirstEnergy R.E. Burger Plant coal-fired power electrical generating facility. They began exploring the possibility of the development in 2015, and the much-anticipated FID announcement has been delayed several times.
“We have completed the first phase of site preparation and engineering work, and we will continue to invest in the safety of the surrounding neighborhood by demolishing vacant structures,” Williamson wrote Friday. “Meanwhile, project leaders are working with our key partners toward a final investment decision for the project.
“While, due to circumstances beyond our control related to the pandemic, we are unable to promise a firm timeline for a final investment decision, we are working hard toward that decision,” the statement continues. “We pledge that we will do everything within our control to make an announcement as soon as we possibly can with the goal of bringing jobs and prosperity to the Ohio Valley.”
PTT/DLM also have responded to environmental concerns, outlining programs the plant would implement to improve the air and water quality of the area if it is built. All necessary permits from the Ohio Department of Natural Resources and Ohio Environmental Protection Agency have been secured.
WIlliamson thanked Gov. Mike DeWine, Lt. Gov. Jon Husted and local officials for their cooperation.
“We are extremely grateful for the support we have received from the DeWine-Husted administration, JobsOhio, Belmont County, Mead Township and the Shadyside Local School District,” he concluded. “Most of all, we appreciate the enthusiasm and the patience of the Ohio Valley community.”