NPRA ’11: NOVA feedstock deal hinged on incentive programme

29 March 2011 19:31  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--Canada’s NOVA Chemical’s new feedstock agreement to draw ethane and ethylene from oil sands off-gas hinged substantially on a government programme that will provide $5 (€3.60) in incentives for each barrel of feedstock produced, a company executive said on Tuesday.

Speaking on the sidelines of the International Petrochemical Conference (IPC), NOVA president of olefins and feedstocks Grant Thomson said Alberta’s Incremental Ethane Extraction Policy (IEEP) figured heavily in the feedstock supply agreement with a subsidiary of Williams.  

NOVA will receive up to 17,000 bbl/day of the ethane-ethylene mix, to be extracted from off-gas produced at oil sands upgrading facilities.

The IEEP was created by the Alberta government to encourage greater production of ethane from natural gas and gases produced as a by-product of bitumen upgrading. It provides fractionation credits to producers.

“The support level [provided by IEEP] is $5/bbl for five years,” Thomson said.

The feedstock mix will be transported via pipeline to NOVA Chemicals' petrochemical facilities at Joffre, Alberta.

Under the arrangement with Williams, natural gas liquids would be extracted from the tar sands off-gas to be used as feedstock, Thomson said. The remaining off-gas would be used as energy by the tar sands oil operation.

“Now Williams has been doing this for a period already but what they’ve been doing is C3 plus – they’ve been producing C3s [propylene] and C4s [feedstock for butadiene] and our deal with them is to also do C2s [ethylene/ethane],” Thomson said.

Sponsored by the National Petrochemical & Refiners Association (NPRA), the IPC runs through Tuesday.

($1 = €0.71)

By: Brian Ford
+1 713 525 2653

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