Partner in Multibillion-Dollar Petrochemical Plant Project Backs Out

BETH BURGER | Columbus Dispatch USA TODAY NETWORK

A Thailand-based company planning to build a petrochemical plant along the Ohio River in eastern Ohio lost its business partner Tuesday, citing economic effects from the coronavirus pandemic and recent volatility in oil prices.

“We are in the process of seeking a new partner whilst working toward a final investment decision. We look forward to making an announcement by the end of this year or early next year on this transformative project for the Ohio Valley Region,” said Toasaporn Boonyapipat, president and CEO of PTT Global Chemical America, in a statement about business partner Daelim Chemical USA breaking ties.

The project, which still has not been formally committed to, will now “encounter a delay of about six to nine months compared to the previously announced timeline,” according to the statement.

Oil and natural gas prices were driven lower when the pandemic hit, resulting in energy companies taking enormous losses. Royal Dutch Shell took a $22 billion write-down, following on a $17.5 billion write-down by BP. It’s unclear whether larger projects such as the ethane cracker plant in Ohio will move forward.

“Under this market situation, PTTGCA and DCA have been assessing the impact for major investment projects to ensure that our portfolio is wellpositioned for the future of [the] petrochemical industry. While we continue to believe in the long

term strategic importance of this project, DCA has taken the difficult but necessary decision to withdraw as an equity partner from the project,” according to a joint statement released by the companies.

JobsOhio, in a statement Tuesday, thanked Daelim for its work on the project.

“JobsOhio continues working closely with PTTGCA to bring the project to a successful final investment decision,” said JobsOhio, the state’s economic development group. “PTTGCA has expressed its belief in the long-term strategic importance of this transformational project, which would bring billions in investment while creating thousands of construction jobs and hundreds of permanent jobs.”

Larry Merry, executive director of the Belmont County Port Authority, said the pandemic has slowed work on the project, but he remains confident PTT will go forward with the project.

“We have worked with PTT for many years on this, and we continue to have great communication and we’re working every day to make this project a reality,” Last month, a group of experts warned Ohio Gov. Mike DeWine about the state moving forward with the project as the price of plastic plummets. The group cited a global oversaturation of ethane-ethylene cracker plants and the plastics they produce. When the project was proposed, the price of plastics was in the range of $1 per pound. Now, plastics sell for 40 to 60 cents per pound.

A recent U.S. Department of Energy report estimated the project’s cost at $10 billion ― twice previous estimates. If it goes forward, it would be the largest economic development project in the state’s history, officials have previously said.

This is the second time a partner has backed out of this project. Japan-based Marubeni Corp. was initially listed as the partner but was later replaced by Daelim Chemical, which is based in South Korea.