WHEELING - West Virginia leaders hope Odebrecht will build a multi-billion-dollar petrochemical complex near Parkersburg, but Consol Energy will not be supplying the proposed facility because the driller's ethane is destined for cracking in Europe.
Consol plans to use $1.5 billion to drill and frack natural gas wells this year, with most of this activity concentrated in areas featuring liquids-rich gas. On Wednesday, Consol officials announced an agreement with Ineos Europe AG to export ethane derived from Consol's Marcellus Shale operations via the Sunoco Mariner East pipeline. Projected to open for service early next year, the Mariner East pipeline will pump up to 70,000 barrels of ethane per day eastward across Pennsylvania to Marcus Hook, Pa. Workers there will process the material so it can be shipped via sea vessel to Europe.
"This agreement, and others like it, signify a vote of confidence that the Marcellus Shale resource base represents a long-term, reliable energy supply for industrial users both at home and abroad," said Nick DeIuliis, Consol president. "We are pleased to partner with Ineos as we continue to expand upon opportunities to diversify end-user markets for our region's natural gas products."
Consol - which recently sold five West Virginia coal mines to Murray Energy Corp. for $3.5 billion - maintains drilling and fracking operations in Marshall County via its CNX Gas Corp. subsidiary, but most of its Marcellus activity is in Pennsylvania. Along with partner Noble Energy, Consol plans to drill at least 88 wells in 2014, including two beneath the Pittsburgh International Airport. Consol also drills wells in eastern Ohio's Utica Shale alongside partner Hess Corp.
"Ineos can now position itself as an attractive customer for upstream companies with interests in the Marcellus, Utica and Upper Devonian gas formations. We will provide these companies with a credible option to diversify sales and supply ethane into our downstream cracker complexes in Europe," said David Thompson, Ineos Procurement & Supply Chain director.
According to its website, Ineos is a global manufacturer of petrochemicals, specialty chemicals and oil products. The company had already reached similar ethane supply agreement with Range Resources for that company's Pennsylvania ethane.