Aux Sable Canada and Dow Chemical announce ethane deal, strategic alliance

Joint venture company Aux Sable Canada Ltd. has struck a deal to sell ethane and ethylene from its Heartland off-gas plant to Dow Chemical Canada Inc.

The financial terms of the agreement were not disclosed.

The agreement makes Aux Sable Canada the first company in Canada to extract ethane and ethylene from the byproduct gas of a bitumen upgrader. The Heartland off-gas plant is under construction just north of Dow Chemical’s complex in Fort Saskatchewan, Alberta. Its feedstock will come from BA Energy’s Heartland upgrader.

According to Aux Sable Canada, the arrangement involves up to 8,000 barrels per day of ethane and ethylene.

The two companies have also entered into a strategic alliance to develop future upgrader off-gas processing projects supplying feedstock for Dow in Fort Saskatchewan. Aux Sable’s Sable NGL Canada affiliate is to build, own and operate these off-gas facilities, with Dow as the exclusive customer.

“A key element of our strategy is to be a leader in the processing of upgrader and refinery off gas. We believe that this alliance with Dow strengthens our ability to aggressively pursue this growth industry, and we are excited about the relationship,” said W. J. (Bill) McAdam, president and CEO of Aux Sable Canada and Sable Canada.

“Our alliance with Aux Sable Canada allows us to secure a long-term supply of petrochemical feedstock,” said Jeff Johnston, president of Dow Chemical Canada. “The oil sands represent a large, untapped feedstock source for Dow’s Alberta operations.”