By Paul Morden from www.theobserver.ca The Observer
Nova Chemicals is considering building a new world-scale polyethylene plant in Sarnia-Lambton by 2017.
The project is one of two potential polyethylene facilities on which the company has begun feasibility and engineering work, the company said Wednesday. The other is in Alberta.
All of the engineering and feasibility studies are expected to be completed by mid-2012.
“The details will be coming available as the engineering evolves, but it is a significant investment,” local company spokesperson Rob Thompson said about the cost of building a new polyethylene facility.
“A new plant would mean new jobs (but) again, it’s too early to determine the exact job creation,” he said.
The announcement is very positive one for Sarnia-Lambton, said Sarnia Mayor Mike Bradley, who also chairs the Sarnia-Lambton Economic Partnership.
“The last world-scale plant we had here was Petrosar, which is now Nova.”
When Nova Chemicals was purchased several years ago “there was real concern about the future of the site here,” Bradley recalled.
But since then the petrochemical industry has enjoyed a resurgence.
“This is an endorsement of the chemical industry and it’s direction,” Bradley said.
Nova Chemicals has three plant sites in Sarnia-Lambton that employ about 900 people.
The announcement said detailed engineering and field tie-in preparation work is progressing at the company’s olefins cracker in Corunna.
The goal is to reach full natural gas liquids feed capacity by the end of 2013.
Nova Chemicals’ chief executive officer Randy Woelfel said in May work at the Corunna plant to take advantage of feedstock from the Marcellus shale basin could be completed for less than $250 million.
Local economic development officials have said tapping into natural gas liquids sent via pipeline from the Marcellus shale deposits in and around Pennsylvania will give Nova a more affordable supply of the raw material to make ethylene.
“New feedstock opportunities are truly game changers for us,” Thompson said, “and they provide the opportunity to fully utilize our assets.”
The company’s polyethylene expansion plans are in the “2014 to 2017 timeframe,” Thompson said, adding, “That would be completion by 2017.”
The engineering and tie-in work at the company’s Corunna site is aimed at increasing production of ethylene.
“That feeds our Mooretown plant,” Thompson said, “and that one would be debottlenecked and expanded.”
The Mooretown plant converts ethylene into polyethylene to make shrink wrap, trash cans, pipes, automotive parts, outdoor toys and other products.
Studies into the potential to carryout “debottlenecking” work at the Mooretown site was also part of Wednesday’s announcement.
“We’re very excited about the prospects for expansion,” Thompson said.
“It has been some time since we’ve been able to talk positively about the long-term future of our existing plants in the Sarnia area, and the potential for growth.”
If the plan to build a new world-scale polyethylene plant goes ahead, it would be built in “the Sarnia area,” Thompson said.
“It’s too early to define the exact facility location, but it would be local.”
Thompson said the company will be “working closely with political, government, regulatory and all our community stake holders, to move these projects from feasibility to definitive.”
Nova Chemicals, headquartered in Calgary, is a wholly owned subsidiary of the International Petroleum Investment Company of the Emirate of Abu Dhabi, United Arab Emirates.
pmorden@theobserver.ca
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