A STATE-OF-THE-ART BUSINESS PARK IN SOUTHEASTERN OHIO

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1 A STATE-OF-THE-ART BUSINESS PARK IN SOUTHEASTERN OHIO Illustration of planned development of MAGNAM Innovation Park MagnamPark.org

2 MAGNAM Innovation Park. Energizing the Polymer Value Chain and Southeast Ohio. When fully operational, MAGNAM Innovation Park will supplement and enhance Ohio s reputation for a strong business climate, skilled workforce, manufacturing leadership, and regional research/ technology innovation through the creation of 10,000 jobs and $2.6 billion in annual economic impact in southeast Ohio. Today, and for the foreseeable future, an unparalleled economic development opportunity exists for southeast Ohio, and the Tri-State region including Ohio, West Virginia and Pennsylvania, that did not exist ten years ago. Southeast Ohio, within the federally designated Appalachian region, sits on top of enormous Utica and Marcellus shale formations. The availability of natural gas from these shale reserves is projected to provide 37% of the nation s natural gas production by To put this into perspective, if the states of Ohio, West Virginia, and Pennsylvania were a country, it would be the third largest producer of natural gas in the world surpassing Saudi Arabia, Iran and Qatar. MAGNAM Innovation Park will capitalize on this abundance of natural gas and natural gas liquids (NGL s) to attract downstream polymer manufacturing and support opportunities while leveraging Ohio s leadership position in the energy sector. For polymer manufacturers and other high-energy intensive industries, MAGNAM Innovation Park s location combines a number of assets that lessen risk and potentially improve cash-flow benefits compared to economic properties development in the Gulf Coast. MAGNAM Innovation Park is uniquely positioned to help high-energy intensive industries take advantage of a once-in-a-century opportunity where like-minded companies can collaborate, benefit, and prosper. And while the advantages to high-energy intensive industries represent a significant shift from the past, southeastern Ohio will benefit from the creation of a vibrant, diversified and innovative economy providing good paying jobs for a knowledge-based workforce, enhancements to local infrastructure, and a higher quality of life for our citizens. Paul R. Brown, Ed.D. President MAGNAM Innovation Park Foundation pbrown@magnampark.org Close proximity to over 70% of U.S. polyethylene demand. 2

3 The Ohio Valley Region is the most profitable location to build a petrochemical plant, exceeding the potential of the Gulf Coast. The Ohio River valley region of Ohio, West Virginia and Pennsylvania, branded the Shale Crescent USA*, is the most profitable region to build a petrochemical plant, exceeding the potential of the Gulf Coast (IHS Markit). This is a dramatic paradigm shift from the Gulf Coast of the United States, long recognized as one of the world s primary petrochemical hubs. An independent study recently conducted by IHS Markit, on behalf of the Shale Crescent USA titled Benefits, Risks, and Estimated Project Cash Flows: Ethylene Project Located in the Shale Crescent USA versus the US Gulf Coast reveals that with reduced delivery costs and low-cost NGL supply, a petrochemical plant located in the Shale Crescent USA would generate a four-times-higher net present value cash flow than a comparable investment in the Gulf Coast. According to IHS Markit, prior studies have estimated the region has sufficient ethane feedstock to support up to five world class ethane cracker plants, including the Shell Chemicals plant under construction in Monaca, Pennsylvania. The study by IHS Markit also concluded that the Shale Crescent USA advantages over the Gulf Costs include: Access to large supplies of low-cost ethane creates a viable advantage for an ethylene project in the Shale Crescent USA region. The benefit of low-cost ethane is augmented by the region s close proximity to over 70% of the nation s polyethylene market. For the first time, market and supply are in close proximity. * Information presented and disseminated by Shale Crescent USA as part of any presentation or discussion, whether in the form of written material, visual or oral presentations is intended to inform listeners and readers. The ideas and opinions expressed are formed based upon sources, research and analysis which are considered reliable, but the accuracy and completeness of such information are not warranted, nor are the opinions and statements, that are based upon them, and, to the extent permitted by law, Shale Crescent USA shall not be liable for any errors or omissions or any loss, damage, or expense incurred by reliance on any information or any statement made or presented in whatever form. In particular, please note that no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, forecasts, estimates or assumptions; and, due to various risks and uncertainties, actual events and results may differ materially from statements and opinions noted herein, as well as written material authored or compiled by anyone other than Shale Crescent USA, its officers, employees, upon which said written materials such statements and opinions of Shale Crescent USA and its presenters are based. Presentations of Shale Crescent USA whether in oral or visual form are not to be construed as legal or financial advice and use of or reliance on any such presentations is and shall be entirely at the risk of those who choose to act upon them. 3

4 The MAGNAM Innovation Park A D V A N T A G E MAGNAM Innovation Park offers many advantages to polymer and associated industries looking for access to low cost natural resources, access to markets, and a skilled workforce. MAGNAM Innovation Park is located near two of the most productive shale plays in the world creating an abundance of natural gas supplies and the lowest natural gas prices in the developed world. No.1 Ohio ranks as the largest consumer of polyolefin in the Midwest MAGNAM Innovation Park is within a day s drive to 50% of high-demand North American markets and over 70% of polyethylene demand. MAGNAM Innovation Park will be located on 2,500 acres in close proximity to the split of two major U.S. Interstate Highways (Interstate 70 runs east-west from Baltimore, Maryland to Utah and Interstate 77 runs north-south from Ohio to South Carolina). MAGNAM Innovation Park provides a location for conducting business that is closely aligned to the opportunities being created by the abundance of natural gas associated with the Marcellus and Utica Shale formations. 262,800 Number of natural gas and oil industry jobs in Ohio $14.7 Billion Wage earnings of those employed in the natural gas and oil industry in Ohio 2 nd Ohio ranks 2nd in plastic workers in the nation 4

5 MAGNAM Innovation Park is located in close proximity to a number of colleges and universities including The Ohio State University, Ohio University, University of Akron (offers degrees in polymer science and polymer engineering), Cleveland State University, Marietta College, Zane State College, Denison University, Muskingum University, and West Virginia University. Ohio sits on large quantities of high-value NGLs used in petrochemical production and plastics manufacturing. Ohio has a highly trained, cost competitive, and productive workforce.* Ohio is No. 1 in polymer and plastics output and the No. 1 consumer of polyolefin in the Midwest.* Ohio is not as prone to natural disasters as the U.S. Gulf Coast. Access to large supplies of low-cost ethane and proximity to over 70% of the nation s polyethylene market make MAGNAM Innovation Park and ideal location for energy-intensive industries. Ohio is ranked 2nd in plastic workers in the nation.* Ohio s energy sector has attracted $64 billion in investments across the energy value chain.* Ohio s natural gas and oil industry supports more than 262,800 jobs and provides more than $14.7 billion in wages.* *Source: Jobs Ohio Identified ethane cracker sites Marcellus Shale Utica Shale MAGNAM Innovation Park Beaver County, PA UNDER CONSTRUCTION Belmont County, OH DECISION PENDING Washington Bottom, WV UNDER REVIEW 5

6 NGL Production Forecasted to Increase by over 700% The Appalachian region of the eastern United States has experienced significant growth in natural gas production and that production is expected to increase for decades to come. According to the U.S. Energy Information Administration (EIA), natural gas production in Appalachia is forecasted to increase over 350 percent between 2013 and The region is rich in natural gas liquids (NGLs), which produce feedstocks, including ethane and propane that the petrochemical industry uses to produce compounds for making plastics. Appalachian NGL production is projected to increase over 700 percent in the 10 years from 2013 to 2023.* 50 years. These formations are among the world s largest known gas reserves. As a result, several petrochemical producers have announced plans to build ethylene and polyethylene facilities in the region and there is potential for more. The growth of natural gas production in the region is attributed to the Marcellus and the Utica shale formations. The Marcellus runs deep in the Appalachian basin from upstate New York south through Pennsylvania to West Virginia and west to parts of Ohio. U.S. Natural Gas Production Outlook Marcellus & Utica SCOOP STACK The Utica shale play lies under most of New York, Pennsylvania, Ohio, and West Virginia. Access to vast, new supplies of natural gas and natural gas liquids (NGLs) from these shale deposits is one of the most exciting domestic energy developments of the past *Natural Gas Liquids Primer With a Focus on the Appalachian Region, Department of Energy December Source: IHS Markit 2018 IHS Markit Permian Eagle Ford Barnett Other Ohio s Academic Institutions Graduate over 170,000 Students Annually. The state of Ohio is home to 23 state-assisted technical and community colleges and 137 universities and colleges including The Ohio State University, Ohio University, Case Western Reserve University, University of Cincinnati, University of Akron, Cleveland State University, Miami University, Youngstown State University, Marietta College, Central Ohio Technical College, Zane State College, Muskingum University, Denison University, and Xavier University. Ohio s academic institutions graduate over 170,000 students annually. And, the state also has more than 250 registered apprenticeship programs. 6

7 One-Low Rate Business Tax Ohio is among the top states in the nation for business climate, economic outlook, regulatory environment, and workforce quality. Ohio has only one low-rate business tax. If your company is looking to relocate or expand, Ohio offers performance-based incentives to assist companies. Funding decisions take into consideration various project factors, including but not limited to job creation, payroll figures, fixedasset investment commitment, project location, and project return on investment.* No corporate income tax No tangible personal property tax No inventory tax No tax on products sold outside of Ohio No tax on machinery and equipment investments No tax on R&D investments No tax on first $1 million in taxable gross receipts *Source: Jobs Ohio Downstream Plastic Products MAGNAM Innovation Park provides an ideal location for firms engaging in converting plastic resins into a number of products including*: Plastic bags Coating or laminating plastics film and sheets Plastic pipes, and plastic profile shapes Tubes, plates and automotive parts Laminated plastic shapes, plates and sheets Foam products such as bedding, cushioning, food containers and cups, insulation, and packaging products Bottles and containers for soft drinks, milk, condiments, food, and household and automotive chemicals End-use market applications including building and construction, transportation, furniture and furnishings, packaging, and medical products *The Potential Economic Benefits of an Appalachian Petrochemical Industry, Economics & Statistics Department, American Chemistry Council, May

8 Mission Statement The mission of MAGNAM Innovation Park is to enhance and support the creation of a healthy, diversified and innovative economy in which leading downstream energy related businesses and knowledge workers connect, innovate, and commercialize by taking advantage of the lowest natural gas prices in the developed world with close proximity to 70% of U.S. polyethylene demand. Vision Statement The MAGNAM Innovation Park vision is to make the region a national model for inclusive innovation, research and technology creating economic growth in the form of new jobs, increased tax infrastructure, and improved quality of life in the southeastern Ohio counties of Muskingum, Guernsey, Noble, and Morgan. Will You Join Us? We would love to tell you more! If you would like to learn more about expanding or relocating your business to MAGNAM Innovation Park, or simply want to learn more about our vision to create a more vibrant economy in southeastern Ohio, contact us! MAGNAM Innovation Park Foundation 925 Military Road Zanesville, OH p contact@magnampark.org