17 June 2011 18:22 [Source: ICIS news]
TORONTO (ICIS)--Moody’s hiked its ratings for ?xml:namespace>
“We expect that NOVA will continue to benefit from lower-cost feedstocks over the next several years," Moody’s said.
NOVA is undertaking several projects that should improve ethane availability at its production hubs in
At Joffre, additional ethane should allow NOVA to operate its plants at or above nameplate capacity, and to expand production of polyethylene by 2013, Moody’s said.
North American feedstock prices are likely to continue to benefit NOVA over the next several years, as exploration and production companies focus their drilling on wet shale gas and midstream companies build more pipelines and fractionation capacity, the agency said.
Moody's expects the price of ethane relative to natural gas prices to decline over the next two years as new fractionation capacity is brought online and pipeline projects are completed.
Ethane currently trades at a premium to natural gas.
However, it trades at roughly half the cost of oil-based naphtha - the primary feedstock used by petrochemicals producers in Europe and
This feedstock advantage is expected to allow NOVA to maintain strong margins and generate high levels of free cash flow over the next several years, Moody’s said.
In addition, NOVA is receiving strong support from
For more on NOVA Chemicals and other producers visit ICIS company intelligence
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