By Paul Morden, www.theobserver.ca The Observer
Major investment will allow use of cheaper feedstock
Converting Nova Chemicals’ Corunna plant to take advantage of using ethane from the Marcellus shale basin could be completed by the end of 2013 for less than $250 million.
That’s the word from Randy Woelfel, the company’s chief executive officer, in a conference call held Thursday to talk about Nova Chemicals’ first quarter results.
He said that engineering work, underway since last year, confirmed the company’s Corunna cracker can be easily converted to use up to 100% natural gas liquids.
“We expect ethane to be our primary feed in the future,” he said.
“We have signed preliminary agreements with two key Marcellus players for a substantial portion of the ethane that we desire and are rapidly working towards definitive agreements,” Woelfel said.
“We are confident that we will have cost-effective pipeline transportation available well before the time our facility upgrades are scheduled to be completed by the end of 2013.”
Ray Curran, with the Sarnia Construction Association, said a $250-million investment would have “a big impact” locally.
Even bigger could be the long-term impact of bringing feedstock from the Marcellus shale basin to Chemical Valley.
“It could open up other avenues for other companies as well,” Curran said.
“That will give us the opportunity for growth and expansion here in the Valley because it’s a cheap source of feedstock.”
Mike Ireland, senior development consultant with the Sarnia-Lambton Economic Partnership, said there was talk going around a conference held earlier this month in Sarnia about new investment coming to Nova.
Tapping into ethane sent by pipeline to Chemical Valley from Marcellus shale deposits in and around Pennsylvania will give Nova a more affordable supply of ethane, a key raw material for making ethylene, Ireland said.
Ethylene is used to make plastic for products like garbage bags and packaging.
Natural gas liquids, like ethane from the Marcellus shale basin, are currently “very affordable” compared to crude oil, Ireland said.
“It would be a big bonus for us up here in Sarnia to get it,” Curran said.
“It’s only 300 miles away in Pennsylvania and most of the pipeline is in place.”
Ireland said a key point that came out of the recent conference was that the region that becomes the initial destination for Marcellus natural gas liquids could be in line for additional investments.
“Several speakers made that point.”
Observer Article ID# 3143404
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