The Northern Panhandle’s chances for a billion-dollar ethane cracker facility could be taking a hit as a Texas-based company is planning to transport 90,000 barrels of ethane daily via pipeline to Louisiana for processing.

The pipeline project, tentatively scheduled for completion in late 2014, is being developed by Marcellus Ethane Pipeline System, a division of the Texas-based El Paso Midstream Group. Company information states the pipeline would include “110 miles of a newly constructed liquid ethane pipeline from at or near Houston, Pa., and at or near Natrium, W.Va. (assuming completion of the Dominion fractionation facility) to at or near Cambridge, Ohio, and surrounding areas.”

Ethane is a component of the “wet gas” found in the region. The cracking action involves processing of the ethane to make ethylene, which is then used to manufacture plastics.

Locating an ethane cracker in the Northern Panhandle has been a priority for development and gas industry officials. The news that ethane could be piped outside the area for processing was not well received.

However, some believe there is so much ethane in the Marcellus that such a pipeline project would not stop a developer from constructing a local ethane cracker facility.

“It would be nice for us to get our ethane cracker first,” said Corky DeMarco, executive director of the West Virginia Oil and Natural Gas Association. “But this is not ‘game over’ because I think there will be enough ethane produced to support sending some of it out, while cracking the rest of it here.”

Officials with Bayer Corp. believe a plot of land near the company’s New Martinsville facility or a site in Charleston would be ideal for the ethane cracker, which would have several hundred jobs paying in the range of $60,000 per year. Despite the planned pipeline from the local shale fields to Louisiana, Bayer officials continue working to land such a facility.

“Bayer continues to have serious discussions with several companies (that) have expressed interest in our sites in New Martinsville and Institute. We will continue these discussions with the goal of securing a future agreement,” said Bayer spokesman Bryan Iams.

DeMarco said, “We are doing everything we can to get these crackers. I want to see things happen here.”

Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia, said the pipeline deal signals that it is time to get to work in bringing the cracker to the Mountain State.

“The race is on. There is a demand for this ethane and the key for us is to get the cracker,” he said. “The good thing is this shows that others are willing to spend money to obtain this product.”

Earlier this year, acting Gov. Earl Ray Tomblin formed the Marcellus to Manufacturing Task Force in the effort to attract an ethane cracker. One of the task force members is Tomblin’s general counsel, G. Kurt Dettinger.

Tomblin “firmly believes that ethane produced in West Virginia should not be shipped out of state, but should instead be used as the foundation for job creation and economic expansion in West Virginia,” Dettinger said.

Dettinger said industry projections call for there to be about 250,000 gallons of ethane production per day from Pennsylvania and West Virginia by 2014.

“The type and size of crackers that have been discussed for development in West Virginia require approximately 60,000 barrels of ethane per day. Thus, the projections indicate that there will be sufficient remaining ethane to support cracker investments in West Virginia even if the Marcellus Ethane Pipeline System project is successful in attracting a portion of that ethane to the Gulf Coast,” he said.

Dettinger added that the market for West Virginia’s ethane, propane, and butane continues to develop and that state officials are working on ways to capitalize on the production.

Burd said he believes there will ultimately be enough local ethane for a cracker to locate in the Mountain State.

“It’s going to take a few years to get one of these crackers up and running anyway. And all that ethane is going to have to go somewhere in the meantime,” he said.