The investment last week by SK Global, a South Korean company, in Blue Racer is indicative of what is coming to the Marcellus and Utica in the Appalachian Basin. SK Global’s move and Daelim’s JV with PTT indicate that the South Koreans are very interested in the downstream opportunities to be realized by the petrochemical industry in the Ohio River Valley. After all, it’s the cheapest place in the world to manufacturer petrochemical.
These moves coincide with comments heard from individuals that the South Koreans are all over Belmont County, Ohio and Wheeling, West Virginia.
The South Korean’s are little late when compared to the Dutch and Chinese. In mentioning the Dutch, I’m referring to Royal Dutch Shell which is building the cracker plant in Monaca in Beaver County, Pennsylvania. Another Dutch chemical company LyondellBasell is in the process of purchasing Braskem from Oldebrecht, a Brazilian petrochemical company.
In purchasing Braskem, LyondellBasell will be building a cracker plant in Parkersburg, West Virginia. Braskem with the authorities in West Virginia when it purchased a site in Parkersburg to build a cracker plant. The LyondellBasell purchase should be completed sometime in 2019. In speaking with midstream companies in the Parkersburg area, I’ve heard that once LyondellBasell finalizes the Braskem purchase it will move quickly to start on the cracker plant.
Lastly, we have the Chinese who made a big splash when Trump traveled to China in November 2017. The $84 billion non-binding trade agreement between China Energy Investment Corporation and the state of West Virginia has gone quiet with trade negotiations. China is in such dire need for natural gas. One can assume that when the trade negotiations are completed the Chinese will be back in West Virginia.
It’s too bad that all the American petrochemical companies are well-established in the Gulf and are not looking to make a move into the Appalachian Basin. If the Dutch, Chinese and South Koreans are successful, we’ll see more petrochemical companies making moves in the Basin. It will probably more Asian companies.