New PE Plant to be Built in US state of North Dakota

The US shale gas boom is leading to construction of petrochemical and plastics production facilities in regions that have never before seen similar investment.

US plastics production now is concentrated primarily along the Gulf of Mexico, but soon North Dakota, the prairie state bordering Canada, will have its own huge polyethylene plant.

The $4 billion facility being built by gas producer Badlands NGL will have capacity to produce 1.5m t of PE and will go on stream in 2019. Output is earmarked for the regional market, but the company plans to market the plastic in other parts of the US and possibly also in Asia.

North Dakota is supporting the project, which is being touted as the largest private investment in the state's history, to create a captive use for the excess gas produced through exploitation of the Bakken shale formation.

The liquefied gas now has to be flared off due to lack of a transportation vehicle. Initially, it was planned to be piped southward through the Keystone XL pipeline originating in Canada's oil sands; however, the pipeine has repeatedly been held up due to ecological concerns.

North Dakota's first PE plant, unveiled by state governor Jack Dalrymple and Badlands CEO William J. Gilliam, "is the solution needed to add value to North Dakota's ethane supply and make it a commercially marketable product," Gilliam said.

Spanish engineering firm Técnicas Reunidas, which has the EPC contract, is currently putting final touches on an engineering analysis for the project. The contractor also will handle the in-licensing of PE production technology.

A binding memorandum of understanding has been signed with distributor Vinmar Projects, which is also overseeing the project's financing.