Ethane Cracker Supply Chain Market Study

Executive Summary

The Ethane Cracker Supply Chain Opportunities market research study explores the potential impact on regional and future businesses of the proposed Appalachian Shale Cracker Enterprise, or ASCENT. ASCENT is a proposed ethane cracker site including the cracker, three polyethylene plants, water treatment facilities, and a gas-fired co-generation power plant to be carried out by Odebrecht, a Brazilian company, with construction slated to begin sometime in 2015.

The Mid-Ohio Valley Regional Council engaged Thomas P. Miller and Associates (TPMA), along with Camoin Associates (CA), to study the potential impacts of ASCENT. Analysis focused on two key areas:

  1. Identifying regional companies that would benefit from the proposed ethane cracker; and
  2. Identifying potential companies that may look to expand to the region in order to takeadvantage of proximity to the cracker

Key Findings

  • Opportunities through the ASCENT cracker lie primarily in the ethylene supply chain. As the key product of the cracking process, ethylene provides the greatest tangible opportunity for businesses retention, attraction, and expansion that the cracker has to offer.
  • While many types of companies within the region will likely benefit from the construction and development of the ethane cracker, regional companies within the ethylene supply chain are most likely to benefit over the long-term.
  • The possibility of low cost feedstock in the region presents significant opportunities for business attraction. The region’s close proximity to several manufacturing markets in the Upper Midwest and Northeast represent opportunities for downstream plastics manufacturers to locate near the feedstock, while being close to final customers.
  • The polyethylene/plastic materials and resins supply chain within the region compares similarly to other areas with existing ethane crackers. No significant supply chain gaps were identified. This is likely due to the existing presence of the oil and gas industry within the region, as well as the fact that plastics resins are currently being manufactured in the region.
  • The ethane value chain can be broken down into five primary groups: Oil and Gas Extraction; Chemical Manufacturing; Plastics and Rubber Products Manufacturing; Wholesalers; and Transportation and Warehousing. The best opportunities for the region will be within the Chemical Manufacturing and Plastics and Rubber Products Manufacturing sectors.

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