RMG signs letter of engagement with Aither Chemicals to build US$750M petrochemical plant on Marcellus shale using Aither's 'clean' catalytic cracker technology that reportedly uses 80% less energy, produces 60% less CO2 than steam cracking

Alison Gallant

PITTSBURGH , January 16, 2012 (press release) – Pittsburgh’s own Renewable Manufacturing Gateway (RMG) has signed a Letter of Engagement (LOE) with Aither Chemicals LLC (Aither). RMG and Aither have agreed to collaborate to finance and build a large chemical plant using Aither’s ethane catalytic cracker technology. With an investment of $750 million over the next five years, the project is expected to create over 2000 construction jobs, 200 permanent direct production jobs, and many thousand indirect jobfs in the Tri-State Region (Western Pennsylvania, Eastern Ohio, and Northern West Virginia). It is anticipated to generate $463 million in annual sales by 2016.

Pittsburgh’s own Renewable Manufacturing Gateway(RMG) has signed a Letter of Engagement (LOE) with Aither Chemicals LLC (Aither). RMG and Aither have agreed to collaborate to finance and build a large petrochemical plant on Marcellus shale using Aither’s ethane catalytic cracker technology. With an investment of $750 million over the next five years, the project is expected to create over 2000 construction jobs, 200 permanent direct production jobs, and many thousand indirect jobs in the Tri-State Region (Western Pennsylvania, Eastern Ohio, and Northern West Virginia). It is anticipated to generate $463 million in annual sales by 2016.

Aither is a petrochemical company formed in 2010 with a mission to convert ethane to high-value chemicals. Aither’s technology uses a patent-pending catalytic cracking method instead of steam cracking to make ethylene. Aither will then convert the ethylene to higher-value chemicals which are easier to ship to customers locally and worldwide. The advantages of Aither’s catalytic cracking technology (compared to steam cracking and other chemical processes) include: lower capital cost, lower operating cost, shorter time to commercial operation, better scalability, and an overall simpler process to produce higher-value products. In compliance with the principles of “green chemistry”, clean catalytic cracking technology consumes 80 percent less energy than steam cracking technology, and produces 60 percent less CO2 output.

Currently the production of ethane-derived petrochemicals utilizes steam cracking technology developed in West Virginia by Union Carbide Corporation in the 1920s. The birth of this technology helped Union Carbide become one of the world’s largest producers of ethane-derived chemicals, and a leading manufacturer of the world’s most widely used plastic, polyethylene. Aither, also a West Virginia company, was formed by accomplished former Union Carbide and Dow technologists and business leaders. Aither continues the tradition of creating chemical value in this region, and will lead the renaissance of the region’s chemical manufacturing industry with Aither’s improvements to cracking technology.

Together RMG and Aither seek to make the Tri-State Region the center of a world-class chemical industry with the commensurate job creation and capital infusion. Each plant represents 200 or more direct jobs and many thousands more indirectly.

Enzo Zoratto, Chief Operating Officer of RMG said, “Aither’s technology is a natural fit to our region. It cost-effectively uses the ethane-rich natural gas from our vast Marcellus Gas deposit to produce highly sought after byproducts, while creating high-value employment in the region. RMG’s commitment to Aither represents a huge step in fulfilling RMG’s job creation mission.”
Leonard Dolhert, CEO of Aither Chemicals, said, “I’m delighted to be working with RMG. Together, RMG and Aither will finance and build one of the largest manufacturing plants that has been built in the region for the past few decades. This will create many jobs and help the regional economy significantly.”

Ethane and Petrochemicals. Ethane is a naturally-occurring hydrocarbon contained in natural gas (the second most common component in raw natural gas after methane) and exists in particularly high concentrations in local Marcellus shale gas. Ethane is separated on an industrial scale from raw natural gas to prepare the gas for commercial use. The chief use of ethane is as a valuable petrochemical feedstock. Ethane is first converted or “cracked” into ethylene, which itself is then converted to higher value petrochemicals, including polyethylene and a host of other chemicals used in everyday products such as clothing, carpets, and computers. The petrochemical market is a multi-trillion dollar world-wide market which is experiencing strong growth.

Because there is currently no ethane cracker in this region, the ethane from the Marcellus can’t be used here, but ethane-derived petrochemicals currently have many markets both regionally and elsewhere. Economics dictate that petrochemical companies should locate their production facilities as close as possible to the ethane source and product markets—here in the Pennsylvania, West Virginia, Ohio region.

Other proposed solutions exist for utilizing the Marcellus ethane including shipping it out of the region, building a steam cracker, and using it for heating fuel. Aither’s technology offers the fastest, most economical, and highest-value use of ethane with the potential for multiple plants and thousands of jobs distributed across the region.

Renewable Manufacturing Gateway. RMG is a Pittsburgh-based nonprofit organization whose mission is regional job creation in the clean technology and renewable energy industries. RMG advises companies in these industries with respect to project structuring, capital markets strategies and introductions, business planning, commercialization, marketing, sales and strategic growth.

Aither Chemicals LLC. Aither is a West Virginia based company and a spinout of Mid-Atlantic Technology Research and Innovation Center, Inc. (MATRIC), a West Virginia non-profit research institute focused on creating market-driven chemical, energy, and environmental innovations. Aither’s and MATRIC’S accomplished scientists and engineers are applying new and existing technologies to take advantage of the rapidly-emerging Marcellus ethane resource.

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