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Williams Expanding Alberta Off-Gas Facilities

Williams plans to invest C$311 million to expand two Alberta facilities to support a long-term agreement with NOVA Chemicals Corp. to produce up to 17,000 b/d of ethane and ethylene.

The facility expansions, which are expected to begin operations in early 2013, would allow Williams to process off-gas from the Alberta oilsands. Williams would modify its oilsands off-gas extraction plant near Fort McMurray, and construct a de-ethanizer at its Redwater natural gas liquids (NGL)/olefins fractionation facility near Edmonton.

"These expansions will add incremental ethane supplies in Alberta, which are high-demand products for the petrochemical industry in Canada," said Williams' Rory Miller, president of the midstream business. "It's a significant growth opportunity for our Canadian midstream business, as we're uniquely positioned as the only company with off-gas experience and facilities in the region.

"The new operations will also further reduce greenhouse gas and sulfur dioxide [SO2] emissions from the oilsands operations."

Williams is building a 261-mile, 12-inch diameter NGL pipeline from its Fort McMurray extraction facility to its Redwater fractionator (see Daily GPI, May 1, 2009). The pipeline is to have a capacity of 43,000 b/d of off-gas NGL/olefins and is expected to be placed into service in April 2012. Additional pump stations to be installed in the future would enable Williams to increase capacity on the pipeline to 125,000 b/d, it said.

The Tulsa-based company now processes off-gas from oilsands heavyweight Suncor Energy, which has a Fort McMurray facility. The NGLs and olefins are processed for transport via the Suncor Oil Sands Pipe Line. Williams' proposed 12-inch diameter pipeline, estimated to cost US$283 million, is to provide additional capacity for Suncor liquids as well as NGL capacity for other area producers' off-gas.

The new upgrades at Fort McMurray would allow Williams to include ethane and ethylene in the NGL/olefins mixture now extracted from the off-gas and delivered to Redwater for fractionation.

The new de-ethanizer at Redwater then would enable Williams initially to produce about 10,000 b/d of an ethane/ethylene mix. The Redwater facility currently produces around 14,000 b/d of a heavier NGL/olefins mixture, which includes propane, propylene, butane, butylenes and condensate.

Future expansions are expected to further increase ethane/ethylene production, Williams noted.

Under the terms of the agreement Williams would deliver the mix produced at Redwater into the Joffre Feedstock Pipeline (JFP). NOVA Chemicals is delivering the product via JFP into its Joffre facilities.

The Alberta government recently modified the Incremental Ethane Extraction Program to provide industry incentives to extract ethane from the oilsands for the petrochemical industry.

"I'm pleased to see that Williams is the first of what I believe will be many companies to benefit from the recent changes to our ethane policy," said Alberta Energy Minister Ron Liepert. "The value-added industry in the province is important, allowing Albertans to get the most out of the province's resources -- whether in investment capital, exported products or jobs."

Williams said its off-gas processing now reduces carbon dioxide emissions in Alberta by about 200,000 tons each year and cuts SO2 emissions by more than 4,200 tons each year. The new expansions would further reduce both types of emissions from its Alberta facilities, the company said.

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