By Paul Morden, from www.theobserver.ca The Observer
The outlook for Nova Chemicals’ Corunna plant is very different today than it was just a half decade ago, according to the company’s chief executive officer.
Nova’s Randy Woelfel spoke about the turnaround during a celebration held at the plant Thursday for the introduction of ethane, piped from the Marcellus shale region of the eastern U.S., as a new lower-cost feedstock for the Corunna facility. “There’s no question that the outlook is fundamentally more positive today than it was just a few years ago,” he said.
The Corunna plant was built in 1977 and by 2008 it was aging and struggling financially as it used a mix of oil and natural gas-based feedstocks to make ethylene used in the manufacturing of polyethylene plastics.
“In fact, in 2008, we lost significant money here,” said Woelfel. That poor financial performance was repeated in 2009.
“It was not clear whether we could see, ultimately, a long-term future here,” Woelfel said.
But, the company saw an opportunity in the emerging Marcellus shale region to take advantage a less expensive feedstock and make the Corunna plant competitive again.
“We got a jump on the rest of our industry and we were a first mover to capitalize on the Marcellus opportunity,” Woelfel said.
Nova moved in 2011 to spent hundreds of millions of dollars equipping its Corunna plant to use up to 100% ethane from natural gas, and to connect the site by pipeline to Pennsylvania’s Marcellus basin.
That work is now nearly complete, leading to Thursday celebration by Nova officials, alongside community representatives.
“Today, Nova is the first player in North America that is actually taking ethane out of Marcellus, adding value to it, and ultimately putting it into the marketplace,” Woelfel.
In December, Nova announced plans to spend another $300 million to expand the Corunna site’s capacity by 20%, and upgrade Nova’s nearby Moore plant, one of two in St. Clair Township that manufactures polyethylene.
“Which would bring us close to almost $1 billion of capital committed and spent here by Nova since 2009,” Woelfel said.
While that work is being done, the company will continue to explore building a new world-scale polyethylene plant, possibly in Sarnia-Lambton, along with an additional expansion at Corunna to feed it.
“The potential is for a multi-billion-dollar investment,” Woelfel said.
Technology allowing natural gas to be extracted from shale deposits has been part of a major change in North America’s energy industry, but it has also be controversial and has raised environmental concerns.
Woelfel said Nova took that into consideration, early on, when it explored using ethane from the Marcellus region
“It was very important for us, if we were going to hang our hats for the long-term on this source of feedstock, we had to feel comfortable,” he said.
He said there’s risk in any industrial process but Nova is confident “what we’re doing, in fact, is environmentally responsible and sustainable for the long-term.”
What they’re saying
– “We in St. Clair Township are very pleased and thankful with the foresight that Nova Chemicals had in leading the way to utilize this latest feedstock development.” St. Clair Township Mayor Steve Arnold
– “Nova Chemicals is a key partner and anchor company in the region that has shown strong support for Ontario’s manufacturing sector by investing here as part of its long-term growth strategy.” Eric Hoskins, Ontario’s Minister of Economic Development, Trade and Employment
– “I want to congratulate Nova Chemicals and the Corunna site on achieving the goal of being the first North American facility to utilize ethane from the Marcellus Shale Basin. Sarnia-Lambton has a long and storied history as a hub of energy and chemistry innovation.” Sarnia-Lambton MPP Bob Bailey
– “Our cracker revamp coupled with the availability of new, cost-competitive feedstock sources creates a great foundation for our recently announced growth plans in the Sarnia, Ontario region.” Tom Thompson, Nova Chemicals manufacturing leader in Sarnia