By Paul Morden – Sarnia Observer – Tuesday, March 15, 2016
A $400-million upgrade at Nova Chemicals’ Corunna plant has received the green light.
The company’s board of directors recently gave its final approval for Nova to invest into creating a pipeline connection to a second source of natural gas liquids, originating in the eastern U.S. shale region, and to convert the Corunna site’s cracker to use up to 100-per-cent ethane feedstock.
Work is scheduled for 2017 and 2018.
“It’s great news for the community, Nova and Nova employees,” said Tom Thompson, regional manufacturing director for the company.
“It’s definitely going to move us forward on our plans to get a second feedstock supply in from Ohio, and more supply reliability. And, give us longer-term sustainability here at the Corunna site.”
Built in 1977, and purchased by Nova Chemicals in 1988, the Corunna plant was losing money by 2008, using a mix of oil and natural gas feedstocks to make ethylene and other chemicals.
But Nova Chemicals saw an opportunity in the emerging shale gas regions of the eastern U.S. and moved to take advantage of the low-cost feedstock to make the plant competitive again.
The company has spent hundreds of millions of dollars since then to convert the plant to be able to use up to 100-per-cent natural gas liquids, and connect by pipeline to Pennsylvania’s Marcellus shale region.
The upcoming capital work includes replacing and enlarging a four-kilometre section of existing pipeline from the plant, to connect to a Plains Midstream Windsor-to-Sarnia pipeline, providing access to natural gas liquids from the Utica Shale Basin.
“The bulk of the money is being spent inside the Corunna site, at the cracker here,” Thompson said.
Most of that work is scheduled for “quite a large turnaround” planned for 2017 at the plant site, he said.
The new pipeline is scheduled to come online in 2018, and some additional work at the Corunna site will be completed that year.
Currently, ethane and other natural gas liquids, primarily propane and butane, are the feedstocks for the Corunna cracker, Thompson said.
While the upcoming work will allow the site to use 100-per-cent ethane, it will maintain the flexibility to use other feedstocks, Thompson said.
Nova Chemicals has approximately 1,000 employees in the Sarnia area, and operates polyethylene plants near Mooretown and the St. Clair River, as well as its Corunna site.
This year’s capital spending plans include work to expand the rail yard at Nova’s Moore site to handle another 200 rail cars, reducing the company’s need to store rail cars off site.
The company is also installing a new thermal oxidizer at the Moore site to reduce emissions of ethylene and other volatile organic compounds. That work is scheduled to be carried out this year and next, Thompson said.
The value of the capital work planned for this year hasn’t been disclosed by the company.
Nova Chemical’s board has also endorsed continued engineering work on a potential new polyethylene plant that could be built in Sarnia-Lambton, and tied to expansion at the Corunna site designed to boost its ethylene output by 50 per cent.
“Engineering is progressing,” Thompson said.
A decision on the new plant and Corunna site expansion could come in 2017, he said.
“We’ve had some aggressive growth plans and, fortunately, have been able to deliver on them,” Thompson said.
“The study work we’re continuing to move forward on is definitely good for our community.”
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