Polyethylene

Polyethylene

Badlands’ initial business plan contemplated building a single world scale (1.53 million MT) NGL sourced ethane gas to PE facility in North Dakota in order to take advantage of physically and economically stranded Williston Basin (“WB”) NGL sourced ethane. Recently, both Northern Border and TransCanada pipelines have seen increased ethane content in their natural gas streams.  The Canadian Energy Research Institute at a recent NGL conference held in Bismarck, North Dakota explained that there will be enough ethane for 2.5 world scale ethane crackers in a few years and there is no use for that ethane.  Likewise, the pipeline authority of North Dakota just gave a presentation explaining that although lower oil prices have reduced drilling and production of oil, gas production remains at all time high levels and NGL production continues to rise because of the concentration of rigs in NGL rich basins.

In January 2015, Badlands began discussions with a view towards first developing a world scale PE facility in a location in the Midwest United States, but still with access to stranded ethane from major shale hydrocarbon resource areas.  Badlands has identified two alternative locations that would enable Badlands to utilize significant quantities of gas from various basins in the U.S. and both locations remain under active consideration as the location for Badlands Midwest PE facility.

Badlands has accomplished most of the milestones required for the development of the polyethylene facility:
  • Badlands has also concluded its preliminary engineering package with its primary EPC contractor including conceptual engineering, full heat and material balances, configurations, logistics and transportation studies, pro forma financials and technology selection.
  • For the Midwest facility, Badlands has executed a license agreement for 1.53 million MT ethylene production and a license agreement for a total of 1.2 million MT of PE production. In addition, Badlands executed a second license agreement for a total of 1.2 million MT of PE production for a North Dakota PE facility.
  • Badlands signed an MOU for 100% PE product off-take for an initial 15-year term.  Under the MOU, the off-taker would market the PE and use its best efforts to achieve maximum netback revenue to Badlands in exchange for a marketing fee.
Currently, Badlands is finalizing its site selection and feedstock supply agreements for the Midwest facility.  Badlands continues to work on the North Dakota facility and believes that both facilities need to be built.