Canadian Plastics

Severe storms curtail PE production in Alberta

Production of ethylene, polyethylene (PE) and co-products at Nova Chemicals Corp.'s (Calgary, AB) Joffre, AB facili...

June 23, 2005   Canadian Plastics

Production of ethylene, polyethylene (PE) and co-products at Nova Chemicals Corp.’s (Calgary, AB) Joffre, AB facility has stalled after six third-party natural gas processing plants in Empress, AB, were damaged after severe storms and high winds on June 21.
This means that Nova has been cut off from approximately 50% of the ethane a feedstock used in the production of ethylene and polyethylene it needs to meet customer demand, the company said Thursday. Nova does not know when supply will resume.
As a result, Nova declared a force majeure on all affected ethylene, hydrogen and polyethylene customers. Force majeure is a clause in a contract that excuses a party from liability if an unforseen event beyond their control, also known as “an act of God”, prevents them fulfilling their contractual obligations.
Nova’s Alberta facility represents 5% of North America’s PE production capacity, which is almost one-third of the Alberta’s total PE production capacity, Nova said. Alberta accounts for 13% of PE production capacity on the continent.

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