News focus: NOVA to expand Corunna cracker by 20% and delay PE plant decision

03 January 2014 09:31  [Source: ICB]

NOVA Chemicals plans to expand the ethylene capacity of its cracker in Corunna, Ontario, Canada, by about 20%. The cracker has a capacity of 839,000 tonnes/year, according to ICIS plants and projects.

In addition, the company plans to pursue a debottlenecking project at its Moore low density polyethylene (LDPE) line in southern Ontario and to retrofit the Moore high density polyethylene (HDPE) line, the company said.

The projects will take place in 2014-2018 under the next phase of the company’s NOVA 2020 programme. The estimated cost is $300m (€219m).

EVALUATING PE PLANT

Meanwhile, NOVA will continue to evaluate whether to build a second Advanced Sclairtech polyethylene (PE) plant. In the past, the company said such a plant could have a capacity of 470,000 tonnes/year.

NOVA chemicals plant NOVA chemicals

NOVA Chemicals

It could be built in Ontario, the US Gulf Coast or elsewhere in the world, NOVA said. If the company pursues the project, it would take place in the final portion of the NOVA 2020 plan. Initially, the company said it could make a decision on the project by the end of this year. If NOVA decides to take on a second PE plant, it would do so in the midst of a chemical plant boom in North America, the likes of which have not been seen in decades.

Petrochemical producers are adding new capacity to take advantage of low-cost feedstock, made available by the advent of shale gas and tight oil.

“It is clearly taxing the resource base to support that type of growth, whether it is looking for skilled workforce or the capacity of engineering companies, the capacity of critical equipment suppliers,” said NOVA CEO Randy Woelfel. Ultimately, this adds up to more time and money, he said. “Work is taking longer to progress. We’re certainly seeing significant inflation in project costs.”

The US Federal Reserve actually noticed the same trend. In its most recent Beige Book, the Fed noted that refiners and petrochemical companies are having a difficult time finding engineers and construction labourers for current and proposed plant expansions.

Shell called off its $12.5bn gas-to-liquids (GTL) project in Louisiana because it had become too expensive.

Cost inflation led NOVA to push the possible second PE plant towards the end of the decade, Woelfel said. “We felt it was a smarter answer for NOVA to do the easily manageable work in our middle phase and our final world-scale expansion a bit later.”

Companies have announced numerous expansion projects in the US as well as Canada.

Enterprise plans to start production at its first propane dehydrogenation (PDH) facility in the third quarter of 2015. It may build a second PDH plant, which could start up in the first half of 2017. In addition to Enterprise, Dow Chemical announced plans to build two PDH plants. Formosa, PetroLogistics and Ascend Performance Materials also announced plans for plants. Williams plans to build one in Canada. Several companies plan to build ethylene and PE plants as well.

LIGHTER FEEDS

Meanwhile, NOVA continues work converting its eastern Corunna cracker to light feeds. The project should be completed in Q1 2014.

NOVA also broke ground on a PE plant in June. It will have a capacity of 1bn lbs/year (454,000 tonnes/year) of linear low density polyethylene (LLDPE), and it will be in Joffre, Alberta. Operations could start in late 2015.

The projects come as NOVA aggressively seeks out new and untraditional sources of natural gas liquids (NGLs) feedstock for the company’s crackers.

PIPELINE DEAL

Recently NOVA signed a letter of intent with a subsidiary of Kinder Morgan Energy, under which the midstream company will build a pipeline connecting the Utica shale in Ohio, US to the Cochin Pipeline near Riga, Michigan, US. Kinder Morgan will then move the NGLs to Ontario.

The $300m pipeline will have an initial capacity of 50,000 bbl/day, expandable to more than 75,000 bbl/day, Kinder Morgan said. The pipeline will cover 210 miles (338 km), and it will be called Kinder Morgan Utica To Ontario Pipeline Access (UTOPIA).

The pipeline should come into service in mid-2017, pending NOVA’s execution of a definitive agreement during the binding open season process, Kinder Morgan said.

In 2011, NOVA reached an agreement with a Williams subsidiary to receive the off-gases produced from upgrading oil sands. The Williams subsidiary aims to produce up to 17,000 bbl/day of the ethane/ethylene mix for NOVA, which will be transported via pipeline to NOVA’s petrochemical facilities at Joffre, Alberta.

Also, NOVA had struck an agreement with Hess and Vantage Pipeline to buy and transport up to 60,000 bbl/day of ethane from Hess’s Tioga gas plant in North Dakota.

NOVA also signed a transportation service agreement with Sunoco to ship ethane feedstock from the US Marcellus shale gas region to Ontario.


By: Al Greenwood
+1 713 525 2645



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