NOVA Chemicals Signs Second Agreement for Marcellus Ethane to Feed its Corunna Cracker Plant
NOVA Chemicals continues to seek out Marcellus ethane to feed its Ontario-based Corunna cracker chemical plant. In May of this year, NOVA penned an agreement with Range Resources to buy ethane (see this MDN article). Just yesterday, they signed a second agreement, this time with Statoil:
NOVA Chemicals Corporation today announced that it signed a memorandum of understanding with Statoil Marketing and Trading Inc. for a long-term supply of ethane from the Marcellus Shale Basin.
“We are very pleased to be working with Statoil for the supply of additional ethane to our Corunna, Ontario cracker. Their supply will help to diversify our supply base for our Corunna cracker revamp project and support our growth plans in the future,” said Randy Woelfel, Chief Executive Officer.
“Statoil is pleased to have reached a framework agreement with NOVA Chemicals for the sale of ethane from the Marcellus Shale Basin. Statoil has over the years had other supply agreements with NOVA Chemicals and looks forward to furthering this commercial relationship,” said Martin Jones – President of Statoil Marketing and Trading (US) Inc.
In addition to finalizing a definitive purchase and sale agreement with Statoil, and customary reviews and approvals, the arrangement is subject to NOVA Chemicals concluding a pipeline transportation agreement to transport ethane from the Marcellus Shale Basin into the Sarnia, Ontario petrochemical market.*
Methane is the primary compound in natural gas that is mined from the earth. However, ethane is also present in some locations—and it’s valuable because of its use as a raw material in cracker plants, used to create plastics. Landowners, check your contracts! Your contract should stipulate extra consideration (and compensation) if ethane is present.
*NOVA Chemicals Press Release (Jul 26, 2011) – NOVA Chemicals Announces Memorandum of Understanding with Statoil for Ethane Supply from Marcellus Shale