Tapping into the Marcellus Shale basin from Sarnia's Chemical Valley

Sarnia's Chemical Valley, with its proximity to rail lines and commercial shipping channels, has always offered an advantageous location to companies doing business there. This advantage has become even more important over the past eight years, following the discovery of a burgeoning supply of natural gas that can be extracted from the U.S. Marcellus Shale basin. Stretching across Pennsylvania, West Virginia, southeast Ohio and upstate New York, the basin is the largest source of extractable natural gas in the U.S.

"This is a game-changer for us, since we can tap into an unprecedented amount of cheaper ethane and generate massive volumes that make us much more competitive in the North American and global markets," says Naushad Jamani, Senior Vice President, Olefins & Feedstock, NOVA Chemicals. Converting the company's previously uneconomical, oil-based Corunna, Ontario facility into one that uses light feed is effecting a turnaround that signals opportunities for more investment in the region.

"Cost-effective production is also a huge consideration for attracting funding for future development from our parent company," he adds. Jamani points out that Canada is competing for capital funding with major industry players in Asia, the U.S. and the Middle East. In addition to feedstock supply, other factors include infrastructure, utility costs, access to customers, community support and a talented workforce.

The road to sustainability can still be profitable

On a commercial banana farm in the tropics, polyethylene bags cover the fruit clinging to the plants. These recyclable protectors help keep insects and the elements at bay, and extend the crop's shelf life after harvesting. Innovative bags such as these, as well as products like playground equipment, industrial drums and recycling bins, are made from polyethylene and styrene resins produced by petrochemical giants such as NOVA.

While many of these products have become indispensable to us, they have traditionally been manufactured from petroleum – an expensive ingredient that also has a higher carbon footprint. By being the first company to move Marcellus ethane north to Canada, NOVA has enabled the shift from heavier crude-based feedstock to lighter feeds. To process these abundant new supplies, the company has spent $250 million to convert its Corunna ethylene cracker into an ethane-based one. The impact of this conversion on the Sarnia-Lambton region has already led to reductions since 2010 of 39% in oxides of nitrogen emissions; 8% direct and 19.3% intensity in greenhouse gas (GHG) emissions; and 31% oxides of sulphur emissions.

NOVA gets out what it puts into the community

Jamani reports that NOVA's mission includes being a good neighbour, and that the community and other stakeholders have been supportive and welcoming. Part of that philosophy is sustainability, one of the cornerstones of the Responsible Care® program that NOVA helped to found in the 1980s. It represents the commitment of chemical industries in more than 60 countries to improve health, safety and environmental performance.

The company has invested millions in local colleges, provided curriculum input and practical training, and grown a base of more than 1,000 direct jobs as well as countless spinoffs with suppliers and contractors. His own story is a good example: "I started working at the Corunna site in 1980, fresh out of the University of Waterloo, worked my way through various departments and am now in a position to make even greater contributions to the future of NOVA Chemicals and Canada." In 2015, he was proud to accept the Minister's Award for Environmental Excellence (from the Ontario Ministry of the Environment and Climate Change) on behalf of the company for their work in converting the Corunna facility to accept lighter feeds, and eliminate its dependency on crude oil.

An across the lake photo of Nova Chemical’s Corunna cracker facility.
Now underway is a $400 million project to convert the Corunna cracker into one that can use up to 100% ethane.

$1 billion invested in Ontario and counting

Jamani admits that NOVA's plans for the future are ambitious. But he knows that the commitment to growth and solidly anchored assets can only benefit a region that has depended on the oil business since 1858.

Over the past 10 years, the company has invested more than $1 billion in its Corunna, Moore and St. Clair River sites. Now underway is a $400-million project that by 2018 will see the Corunna cracker converted to utilize up to 100% ethane. Also in development is a proposal to build a world-class polyethylene facility. If approved by NOVA's board of directors in 2017, it will be the largest investment in industry the Sarnia-Lambton region has seen.

"I am optimistic that the solid relationships we have built with our stakeholders over the years will help us make a compelling argument for attracting capital funding in this global playing field." And for good neighbours, that's just good business.

"We are mindful of worldwide fears about global warming, the public's concern for the health of their environment and the need for renewable resources. To those ends, we are on a mission to lower our carbon footprint and develop environmentally friendly products for the community's health and safety."

- Naushad Jamani, Senior Vice President, Olefins & Feedstock, NOVA Chemicals

Sector/subsector: 

November 8, 2016

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