Firm pays back $20M, insists petrochemical project viable

CLEVELAND (AP) — The U.S. subsidiary of Thailand-based petrochemical giant PTT Global Chemical has repaid Ohio’s private economic development office $20 million after it failed to make an investment decision in 2020 on a proposed petrochemical plant in the state.

Spokespersons for both PTT Global Chemical America and JobsOhio said this week the company remains committed to building the multi-billion dollar project in southeast Ohio’s Belmont County as PTTGCA continues searching for an investment partner.

The $20 million was paid to Bechtel Corp. in 2019 to complete site engineering and site preparation for a plant that would convert ethane — a byproduct of natural gas drilling from the Utica and Marcellus shale fields — into different types of polyethylene, raw materials for products that range from plastic bottles to vehicle parts.

The project has been optimistically viewed as a potential economic development boost for an Appalachian region still struggling from the loss of manufacturing jobs decades ago. The plant, its backers say, would create thousands of construction jobs and hundreds of permanent positions and spawn a manufacturing renaissance along the Ohio River.

A similar $6 billion petrochemical plant built by Shell Chemical Appalachia LLC 30 miles (50 kilometers) northwest of Pittsburgh is scheduled to begin operations this year. Shell announced its final investment decision in 2016. News that PTTGC would partner with a Japanese company to build a petrochemical plant in Belmont County first surfaced in 2015, spurring talk of a regional petrochemical hub to take advantage of abundant supplies of ethane.

In an interview with The Associated Press this week, Ohio Lt. Gov. Jon Husted expressed skepticism about whether the Ohio plant would be built.

“They can’t find a partner because of market conditions,” Husted said. “They’re the ones who made the promise on what they’re going to do, and it’s up to them.”

Husted said the site, which is owned by PTTCGA, would be attractive to other developers.

“There’s a lot of options for other end users,” Husted said. “The last thing I’m going to do is create a false hope. People in Appalachia have been promised a lot of things that businesses never delivered.”

PTTGCA spokesperson Dan Williamson said the company has invested $300 million in the project thus far and that company officials are committed to building the plant. He said there is no deadline for a decision on building it.

“If the company wasn’t still hopeful of this happening, they would not continue to invest in it,” Williamson said.

JobsOhio spokesperson Matt Englehart blamed the coronavirus pandemic for the delay in an investment decision that resulted in PTTGCA paying back the $20 million. A U.S. subsidiary of South Korea’s Daelim Industrial Co. withdrew as PTTGCA’s partner in July 2020.

JobsOhio, which is funded with profits from Ohio liquor sales, has provided an additional $50 million in grants and loans for developing the site where a FirstEnergy Corp. coal-burning power plant once stood.

“PTTGCA remains committed to the project, and JobsOhio and its partners continue to work closely with PTTGCA to bring the project to a positive final investment decision,” Englehart said in a statement, adding that PTTGCA is “actively pursuing investors.”

PTTGCA is “in the process” of resubmitting its expired air permit to the Ohio Environmental Protection Agency, Williamson said. The permit will reflect PTT Global Chemical’s commitment to reducing global emissions 20% by 2030 and net zero emissions by 2050, he added.

The Ohio EPA recently renewed the company’s wastewater discharge permit.

Working in the company’s favor is that prices for polyethylene and other raw plastics have rebounded since a steep drop in 2020. Analysts say global demand for plastic products will continue to rise this decade.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Follow @ktar923