Badlands NGL plans to build a $4 billion polyethylene (PE) manufacturing facility in North Dakota, which will be the largest private sector investment made in state history.
The manufacturing facility will use North Dakota's abundant supply of natural gas liquid sourced ethane gas coming out of the Williston Basin as a byproduct of oil production.
The Badlands facility will convert the ethane to polyethylene and the facility will be able to produce 1.5 million metric tons of polyethylene, or 3.3 billion pounds annually, and employ in excess of 500 people in manufacturing, marketing, administrative, safety, financial and executive positions. The project will take at least three years for full development.
"Badlands is proud to bring this manufacturing facility to North Dakota," said Badlands NGL's chairman and CEO William Jeffrey Gilliam. "We are committed to maximizing the value of Bakken ethane for producers, their midstream partners and all gas processors. This facility is the solution needed to add value to North Dakota's ethane supply and make it a commercially marketable product. In doing so, there will actually be a market advantage for North Dakota polyethylene products. "
U.S. production of ethane from other geological formations will be expanding, reaching a projected 2.6 million barrels a day by 2020. Based on national demand as well as expected exports, a tremendous amount of the U.S. ethane supply will remain untouched. Due to North Dakota's remote geographic location, the state's supply will be the most economically disadvantaged, according to the company.
"This project is fully aligned with our goals to reduce flaring, add value to our energy resources right here in North Dakota and create diverse job opportunities across the state," said North Dakota Gov. Jack Dalrymple. "By advancing the responsible development of our energy resources and by adding value to all of our resources, the opportunities in North Dakota are boundless."
Badlands intends to market the majority of the PE products to U.S. markets, but anticipates the product will also find its way to global markets, including Southeast Asia.
To bring this plant to fruition, Badlands is working with two partners, Tecnicas Reunidas, which is based in Madrid, Spain, as well as Vinmar Projects of Houston. TR, one of the largest petrochemicals and polymers contractors in the world, is completing a preliminary engineering analysis for Badlands. This work is scheduled for completion in 2014 and will include completion of technology evaluations and ethane to ethylene and ethylene to PE licensor selection, ethane aggregation engineering and planning and final site selection.
Vinmar provides long term product off-take services in support of project finance for the development partners. Vinmar and Badlands have signed a mutually binding, 15-year product off-take Memorandum of Understanding for 100 percent of the PE product to be produced by the Badlands project.
There wasn't much information on Badlands NGL in the release. According to the company's LinkedIn page, Badlands NGL is public affiliated with Iron Sands Corp., which is a company "organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation."