News focus: NOVA breaks ground on Joffre polyethylene expansion; mulls same at Corunna

14 June 2013 09:27  [Source: ICB]

As the company breaks ground on its worldscale polyethylene project in Alberta, it will make a decision on another

NOVA Chemicals' groundbreaking ceremony on 7 June for a 1bn lb/year (454,000 tonne/year) linear low density polyethylene (LLDPE) expansion project in Joffre, Alberta, Canada, heralds what could be the first major polyethylene (PE) project in North America to come on line by 2015. And NOVA is now considering a similar project at its Corunna site in eastern Canada.

 NOVA CEO Randy Woelfel at the groundbreaking ceremony

NOVA Chemicals

The groundbreaking was symbolic in many ways, according to CEO Randy Woelfel. Not only did it mark the beginning of construction on the nearly $1bn (€760m) project, but it also symbolised NOVA's further transformation into a multi-feedstock company.

"I think it's another tangible confirmation of what we call 'New NOVA'," Woelfel said in an interview with ICIS.

Construction on the LLDPE ­expansion should be complete by 2015, with the facility set to come on line by the fall of that year, the CEO said.

The expansion will add to the two current production trains about 40% more PE capacity and will use existing ethylene capacity at the site, NOVA has said.

That ethylene increasingly will be cracked from ethane produced as part of the North American shale gas and oil boom. The Joffre site will get ethane gases associated with oil sands wells, while NOVA's Corunna, Ontario, site will use ethane from the Marcellus Shale and associated gases from the Bakken Shale to make petrochemicals, Woelfel said.

"We are a story partly of the shale gas boom, but also of the unconventional oil development," he said. "We recognise [the shale boom] as a unique opportunity."

NOVA could also undertake a PE expansion similar to the one under way at Joffre, as it is "progressing" in its exploration of such a plant at Corunna, Woelfel said. A decision could come by the e_SDHpsecond half of this year, he added. The Canada-based company, which is owned by Abu Dhabi-based International Petroleum Investment Co (IPIC), is also weighing its options for expanding to the US Gulf Coast and outside North America, Woelfel said.

"We're clearly trying to analyse what is the best opportunity base for us," he said.

Shale gas provides NOVA with an opportunity to transform itself into a company akin to an octopus, the CEO said, trying "to have tentacles in the development of a whole range of feedstocks".

That plan includes processing shale gas, oil sands, condensates and natural gas liquids (NGLs) to make petrochemicals.

France-based engineering firm Technip has the detail engineering and procurement services contract for the Joffre PE expansion project, as well as for the modification and design of ­existing purification systems.

For the Joffre LLDPE project, some 600 people will be employed at the peak of the construction phase, with the project creating up to 50 ongoing jobs, the CEO said. Add in the $1bn being spent on the project and "it's a pretty dramatic positive economic ­impact", Woelfel said. The US shale gas boom has triggered a wave of expansion plans in ­petrochemicals and polymers.

Many other petrochemical companies also envision downstream PE plants from their new planned ethane crackers in the US.

Yet the earliest of these PE plants are likely to come on line in 2016-2017.

In March, LyondellBasell announced it was in the early stages of evaluating a possible new 1bn lb/year PE plant in North America, which could come on line by 2016. The project would cost around $200m. However, unlike many of its competitors, the company has not announced plans for a new cracker.

LyondellBasell is also planning a PE debottleneck at one of its existing facilities, which would add 220m lb/year by 2014 at a cost of $20m.

But NOVA is likely to be the first to capitalise on US shale gas on the PE front in a significant way, with its 1m lb/year Joffre project set to come on line by 2015.

Yet in North America, another PE project is set to come on that year. Braskem Idesa - a 75:25 joint venture between Brazil's Braskem and Mexico's Idesa - is building the Ethylene XXI project, which involves an ethane cracker, along with PE facilities.

The project in Coatzacoalcos, Mexico, will include a 1.05m tonne/year ethane cracker; two high density polyethylene (HDPE) plants with capacities of 350,000 tonnes/year and 400,000 tonnes/year; and one 300,000 tonne/year low density polyethylene (LDPE) plant. It is expected to be complete by mid-2015.

Additional contribution from Joseph Chang

By: Jeremy Pafford
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