Range Resources Corp. (NYSE: RRC) reported last week that it has signed a long-term deal to become an anchor ethane supplier for a proposed world-scale ethylene cracker in Appalachia.
“We are pleased to help support a world-class project that brings additional jobs to Appalachia, while utilizing our low-cost natural gas resources,” Range CEO and President Jeff Ventura commented in a written statement regarding his company’s supply agreement with PTTGC America LLC (PTTGCA).
Range noted that that it would supply 15,000 barrels per day of ethane under the agreement. The deal hinges on PTTGCA’s reaching a final investment decision on the petrochemical project, which would be located along the Ohio River in Belmont County, Ohio. According to PTTGCA, a unit of Thailand-based PTT Global Chemical Public Company Limited, the complex would be capable of producing 1.5 metric tons per annum of ethylene and its derivatives.
“Range views this project as a win-win-win for Range, PTTGCA and the many communities in the Northeast that will benefit from the economic boost this facility projects,” continued Ventura. 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. Range will also receive a significant revenue uplift compared to selling into the natural gas stream.”
In addition, Range pointed out that a final investment decision on the Ohio complex is expected early next year.
“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 in the region to make this world-scale polyethylene complex a reality,” remarked Toasaporn Boonyapipat, PTTGCA’s president and CEO. “During construction and upon completion, this project will provide local communities with an abundance of new jobs and opportunities that will strengthen local economies, while the polyethylene produced at the facility can be used to create products that are critical to this nation, such as medical equipment and food packaging.”
PTTGCA estimates the cracker project represents approximately $10 billion in investments. The company has revealed that it has already spent approximately $200 million to conduct detailed front-end engineering design.
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