01 December 2006 18:45 [Source: ICIS news]
TORONTO (ICIS news)--A planned sharp increase in the tariffs for feedstock shipments on Canada's Cochin pipeline is set to add to the woes of Ontario’s petrochemicals hub in Sarnia, a top Canadian chemicals analyst said on Friday.
BP, which operates
Tariffs on the line’s western leg, from
"The proposed increase in the tariff is substantial," John Cummings, a Toronto-based independent petrochemicals analyst, said in a research note to clients, adding that it would hurt the profitability of Sarnia-based ethylene and derivatives production.
The increases do not cover expenditures required for upgrading the line to resume ethylene shipments, which BP suspended earlier this year citing safety reasons.
Cummings said BP is taking a cautious approach in testing the whole line because of the recent problems it had at its
A spokesman for ExxonMobil’s Canadian affiliate Imperial Oil told ICIS news that the rate hike may impact the company’s petrochemicals business in Sarnia. However, he stressed that Imperial is able to obtain alternative feedstock and ethylene through the ExxonMobil network to support its
Nova Chemicals expects any direct impact on it to be minimal as it hardly use the line any longer, it said in a brief statement. “We will be interested to see any market impacts that may result from this tariff increase,” the Calgary-based petrochemicals major added.
Whether BP can successfully realise the rate hike remains to be seen, Cummings said.
A key factor will be the long-term availability of surplus ethane in
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections