NOVA Chemicals Corp. said Tuesday it had signed agreements with three companies for a long-term supply of Marcellus Shale ethane for its thermal cracker facility in Ontario.
Calgary-based NOVA said it has concluded a transportation service agreement with Sunoco Pipeline LP, which will transport ethane 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.
NOVA said it has also signed definitive agreements for long-term supplies of ethane from a Range Resources Corp. subsidiary and from Caiman Energy LLC.
"We are excited to have these critical strategic pieces in place," said NOVA CEO Randy Woelfel. "The capital project enabling our Corunna cracker to utilize up to 100% NGLs [natural gas liquids] is on target, and we anticipate seeing all three project initiatives...come together before the end of 2013."
Range's contract with NOVA -- its first for the sale of Marcellus ethane -- became effective after the binding open season of the Mariner West pipeline project, a joint venture of MarkWest Liberty Midstream & Resources LLC and Sunoco Logistics Partners LP (see Shale Daily, March 24). Mariner West will use new and existing pipelines to transport up to 65,000 b/d of ethane from Pennsylvania to Canada by the second half of 2012. Range said its initial deliveries would begin in late 2013, with full deliveries realized in early 2014.
"This is an important milestone in the development of the Marcellus Shale," Range CEO John Pinkerton said. "After years of planning and studying alternative solutions, this project is the first in a series of projects expected to be built to service the growing liquids-rich area of the Marcellus Shale."
Pinkerton added that the contract with NOVA would help ensure that Range "can continue to ramp up our Marcellus Shale development in the liquid-rich area of the play."
NOVA's agreements with Sunoco, Range and Caiman follow a memorandum of understanding it signed with Statoil Marketing and Trading Inc. for a long-term supply of ethane to Corunna on July 26 (see Shale Daily, Aug. 2).
Financial and volume details for the four aforementioned agreements with NOVA were not disclosed.
NOVA spokesman Pace Markowitz told NGI's Shale Daily the company was committed to continuing its capital project to revamp the Corunna facility from a flexi-cracker to one that would take 100% light feedstock, with ethane being the primary import. The company also has designs to grow its proprietary polyethylene business through its "NOVA 2020" plan (see Shale Daily, Aug. 15).
"As part of our strategic vision for the next 10 years, we're looking at the possible expansion of the [Corunna] unit to correspond with a world-scale polyethylene facility," Markowitz said Tuesday.
NOVA is a subsidiary of the International Petroleum Investment Co. of the Emirate of Abu Dhabi.