Statoil Marketing and Trading Inc. (SMT) will supply NOVA Chemicals Corp. with a long-term supply of ethane from the Marcellus Shale play, under the terms of a memorandum of understanding (MOU) announced by the two companies.
The ethane would be transported to NOVA's ethane cracker at Corunna, ON, part of the company's refinery and petrochemical complex in Sarnia-Lambton's Chemical Valley. The cracker has a processing capacity of 1.8 billion pounds per year.
"We are very pleased to be working with Statoil for the supply of additional ethane," said Randy Woelfel, CEO of NOVA. "Their supply will help to diversify our supply base for our Corunna cracker revamp project and support our growth plans in the future."
SMT President Martin Jones said his company had conducted other supply agreements with NOVA in the past.
Pace Markowitz, a spokesman for Calgary-based NOVA, told NGI's Shale Daily that the financial terms and the duration of the deal would be kept private, but did say the agreement "was not just for a short-term supply."
The companies must still finalize the purchase agreement for the ethane and will also conclude a pipeline transportation agreement. Markowitz said the companies would make a separate announcement on the pipeline deal in the future.
NOVA is a wholly owned subsidiary of the International Petroleum Investment Co. of the Emirate of Abu Dhabi. SMT is headquartered in Stamford, CT, and is a division of Norway's Statoil ASA.