Price and market trends: NOVA explores Canada ethylene expansions

05 April 2013 09:43  [Source: ICB]

Company may need more feedstocks for a Canadian Advanced Sclairtech PE plant of around 470,000 tonnes/year

NOVA Chemicals will explore an expansion of ethylene capacity in eastern and western Canada to take advantage of low-cost shale gas feedstock, a senior executive said on 25 March.

NOVA site 

 Expansions are coming to the NOVA site in Corunna, Canada

 Grant Thomson

 Thomson: 'diversified portfolio'

"If we decide to grow our eastern assets, we then would need additional feedstocks and go back to the Marcellus and Utica [shales]," said Grant Thomson, NOVA president of olefins and feedstocks, on the sidelines of the International Petrochemical Conference (IPC).

CORUNNA CONVERSION
NOVA is in the process of converting its Corunna cracker in eastern Canada to use up to 100% natural gas liquids (NGL) by the end of 2013. It is a flexi-cracker that had processed about 50% heavy feeds and 50% NGL.

"We'll get ethane supply from the Marcellus - first from July, and then fully up to speed by early 2014," said Thomson.

NOVA has an agreement with Norway-based Statoil for the latter to supply ethane from the US Marcellus shale to its Corunna cracker. The Corunna facility has ethylene capacity of 1.8bn lb/year (820,000 tonnes/year), and the ethylene capacity will remain the same immediately after the conversion, said Thomson.

But this will lead to expansion opportunities at Corunna, he said. "This conversion will allow us to have relatively inexpensive debottlenecking opportunities as we will use less furnaces," said Thomson. "We'll have extra potential capacity of a couple of furnaces," he added. The Corunna site has about 12 furnaces, he noted."So the next question is: Do we increase ethylene supply at Corunna, and by how much? Then we can think about options for a new Advanced Sclairtech PE [polyethylene] plant," Thomson said.

NOVA is in the early stages of planning to build another Advanced Sclairtech PE plant of around 470,000 tonnes/year. Taking a longer-term view, NOVA and the Alberta government are evaluating if there could be enough NGL supply in the region for another worldscale cracker, said Thomson.

"Looking out in 10 years, if big oil and gas producers are successful in their liquids plays, then this could drive another cracker," Thomson said. "Both industry and certainly the government are keen on growing the petrochemical sector. Down the road, strategically this is something we have to think about," he added.

PP REVIVAL
In addition to ethylene production opportunities, Canada could see a revival in polypropylene (PP) from on-purpose propylene production.

"With Williams building a PDH [propane dehydrogenation] plant in Alberta, there's the possibility of PP production moving into western Canada," he said.

But Thomson emphasised that NOVA's first priorities are completing its Corunna cracker conversion by the end of 2013 and its 1bn lb/year (450,000 tonnes/year) linear low density polyethylene (LLDPE) plant in Joffre, Alberta, Canada, by 2015. "Beyond 2015, we would look at other major options," he said.


NOVA confident on Joffre crackers feedstock supply
NOVA Chemicals is confident that various supply arrangements to pump more natural gas liquids (NGLs) into its site in Joffre, Alberta, Canada, will allow the crackers to run at full capacity, a senior executive said on 25 March.

"We wouldn't be making these downstream investments in polyethylene [PE] if we weren't confident on feedstock supply," said Grant Thomson, NOVA president of olefins and feedstocks, on the sidelines of the International Petrochemical Conference (IPC).

NOVA is in the engineering phase of its planned new 1bn lb/year (454,000 tonne/year) linear low density polyethylene (LLDPE) plant in Joffre. "NGL supplies from the Marcellus [shale] and Williston [North Dakota - Bakken shale] will arrive on time and on budget. We will get ethane from the Vantage pipeline by late 2013. Hess is already building gas processing capacity," said Thomson.

The Vantage pipeline, bringing an initial 40,000 bbl/day of ethane from the Bakken Shale in North Dakota, is expected to start running by the end of 2013 and will be operated by NOVA.

US oil and gas producer Hess is building natural gas fractionation capacity in North Dakota.

NOVA will also secure ethane from offgas related to Alberta oil sands production, said Thomson. "Our strategy is to have a diversified feedstock portfolio with ethane, propane and butane," said Thomson.

"We are constantly looking for new sources, but I would say we are very satisfied to the point where we can fill out our assets in Joffre 100%," he added.

NOVA has three gas-based crackers at Joffre. Its wholly owned E1 and E2 crackers have ethylene capacity of 730,000 tonnes/year and 820,000 tonnes/year, respectively.

Its E3 cracker, which it shares with US-based Dow Chemical on a 50:50 basis, has 640,000 tonnes/year of capacity.

Meanwhile, NOVA Chemicals is in the engineering phase of its planned new 1bn lb/year (454,000 tonne/year) linear low density polyethylene (LLDPE) plant in Joffre, Alberta, Canada, according to Thomson.


By: Joseph Chang
+1 713 525 2653



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