Range Resources Corp. agreed to become an anchor supplier for a proposed ethylene cracker in Appalachia, the Fort Worth, Texas-based company said Sept. 23.
Under the agreement, the shale gas producer will provide 15,000 bbl/d of ethane as feedstock for an ethane cracker being built by State-owned Thai oil and gas company PTT PCL along the Ohio River in Belmont County.
Jeff Ventura, Range’s CEO and president, called the project a “win-win-win” for the company, PTT and Northeast communities he said would benefit from an economic boost the facility will provide.
“Importantly, for Range, ethane supplied to PTTGCA will be sourced from existing natural gas production and NGL processing facilities with the benefit of no additional transportation required,” Ventura said in a Sept. 23 statement. “Range will also receive a significant revenue uplift compared to selling into the natural gas stream.”
Range’s operations are focused on the Marcellus Shale, which the company claims to have pioneered in Pennsylvania’s Washington County in 2004, according to the company’s website.
In the second quarter, the independent E&P company produced about 2.083 Bcfe/d of natural gas and NGL. The company holds nearly a million net acres across Pennsylvania, most of which has stacked pay potential for the Marcellus, Utica and Upper Devonian shale formations.
In a statement commenting on PTT’s agreement with Range, Toasaporn Boonyapipat, president and CEO of the company’s U.S. subsidiary PTTGCA, said: “We are excited to announce this agreement with Range Resources, a domestic leader in natural gas and natural gas liquids production. Range’s deep inventory of high-quality wells will provide our facility with a safe and reliable source of ethane in the years to come, and we look forward to additional partnerships with producers in the region to make this world-scale polyethylene complex a reality.”
The ethane cracker is designed to produce about 1.5 million metric tons of ethylene per year and will take four to six years to build.
In June, PTTGCA delayed making a final investment decision to build the ethane cracker, which analysts estimate will cost $5.7 billion, from the first half of 2020 to the first half of 2021 due to the coronavirus. The company has said that if it were not for the coronavirus, the plant would likely already be under construction, according to a report by Reuters.
In addition, to PTTGCA’s project, Royal Dutch Shell Plc is building an ethane cracker nearby in western Pennsylvania.
Reuters contributed to this report.
Separately, the EIA projected U.S. natural gas output would decline for a third month in a row to 81.8 Bcf/d in November. That would be down over 600 MMcf/d from its forecast for October.
U.S. energy firms last week added oil and natural gas rigs for a third week in a row for the first time since October 2018 after price increases in recent months prompted some producers to start drilling again.
The crude oil production decline was the second consecutive slip, following a fall in January, according to data from the U.S. Energy Information Administration.