Odebrecht withdraws from Wood County cracker plant; subsidiary takes lead

CHARLESTON, W.Va. — Odebrecht, the Brazilian company which has been leading the way in the development of a $4 billion ethane cracker plant, Ascent, in Wood County recently announced it’s no longer participating in the project but has shifted control to its wholly-owned subsidiary Braskem.

David Peebles, Odebrecht Director of Business Development, was with Gov. Earl Ray Tomblin at the November 2013 announcement.
David Peebles, Odebrecht Director of Business Development, was with Gov. Earl Ray Tomblin at the November 2013 announcement.

There were a number of factors that resulted in the decision, state Commerce Secretary Keith Burdette said Wednesday on MetroNews “Talkline.”

“I think for a lot of internal reasons,” Burdette said. “Odebrecht is mired in some real significant challenges in Brazil and I think they are distracted with that and other issues. Braskem is the one that started the project in the first place.”

Braskem was seen by Odebrecht as being more focused moving forward with the commitment to Ascent, the Appalachian Shale Cracker Enterprise, Burdette said.

“Braskem actually was the one who started the (Ascent) project in the first place. They have subsequently opened one of these (ethane crackers) in Mexico which is online and producing,” Burdette said.

The two companies made a joint announcement in April 2015 that said the Wood County projected needed more review.

“Under the current energy scenarios, the original configuration of Project ASCENT needs to be re-evaluated, and a final investment decision on the project will require more diligence,” the statement said.

The decline in oil prices since the project was first announced in 2013 has made the plan less competitive, the companies have repeatedly said.

Burdette maintains Braskem is committed to the project but a final decision on whether to move forward has been delayed.

“On hold doesn’t mean it’s not going to happen,” he said. “They have not made a decision not to do the project.”

Braskem now owns the property and the site has been cleared and prepped. Some permits are being pursued others are on hold, Burdette said.

Meanwhile, there’s a lot West Virginia should be excited about when it comes to two other projects recently announced in other states, Burdette said.

“The Shell (cracker project in Pennsylvania) is 10 miles from the (northern) panhandle border and the PPP project (in Belmont County, Ohio) is literally at the foot of the Arch Moore Bridge (across the Ohio River from Moundsville),” according to Burdette.

There is a “huge and growing interest” in other components related to natural gas liquid and West Virginia is receiving inquiries, Burdette said.

“There are other projects that aren’t ethane related that we’re in active conversations about that could almost be as big as one of these crackers. There remains a huge amount of interest,” Burdette said.

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