Badlands NGL, a startup firm with private equity backing, plans to build the first ethylene cracker in North Dakota, which will provide feedstock for a 3.3bn lb/yr polyethylene plant.
The company has not specified the capacity of the ethylene cracker or how much ethane the facility will require for feedstock. The company also has yet to choose the technology it will use for the project and has not received required permits to build the plant. Regardless, Badlands expects it to come online by 2017.
The cracker would source ethane from various gas processing plants throughout the Williston basin, and is underpinned by a 15-year takeaway agreement with olefins marketer Vinmar, who will obtain 100pc of polyethylene produced at the Badlands facility.
Given the ambitious timeline, Badlands said it will put up capital for long-lead items prior to receiving necessary permitting, chief executive William Jeffrey Gilliam said. He declined to name the private equity investors backing the $4bn project.
The company plans to make a decision on which technology it will use for the cracker by November.
The announcement comes as many US companies are racing to build ethylene crackers to take advantage of the cheap NGL feedstocks unlocked by the recent domestic shale boom.
The new ethylene cracker is also slated to help reduce natural gas flaring throughout North Dakota, following an attempt by the North Dakota Industrial Commission to systematically reduce flaring . The regulatory body aims to cut flaring to 15pc by the first quarter of 2016, and to 5-10pc by the fourth-quarter of 2020. Producers who do not comply with new flaring restrictions will have to limit crude production.
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