Canadian Plastics

New projects by chemical suppliers highlight growth of shale gas fracking

Looking for a word to describe the potential influence of shale gas fracking on the North American plastics industry? How about “transformative”?

August 6, 2012   Canadian Plastics

Looking for a word to describe the potential influence of shale gas fracking on the North American plastics industry? How about “transformative”?

It’s only been a few short years since the energy industry began tapping deposits in the Marcellus Shale Formation in New York, Pennsylvania, and Ohio, but natural gas reserves in the U.S. have already increased by almost 30 per cent…and chemical suppliers are rushing to exploit this new wellspring. The Dow Chemical Company, Formosa Plastics Corporation, and Chevron Phillips Chemical Company have all unveiled North American expansion plans; ExxonMobil Corp., meanwhile, is considering building two new polyethylene lines in Mont Belvieu, Tex., as well as a new ethane cracker in Baytown, Tex.

North of the border, Nova Chemicals Corporation has a series of growth projects of its own in development in Ontario’s Chemical Valley, including the possible construction of a new world-scale polyethylene plant in Sarnia-Lambton.

A decision on the Sarnia-Lambton plant isn’t expected until 2013, the Calgary, Alta.-based company said, and hinges on the progress of two other projects. “In June of this year we began cracking an ethane/propane mix from Conway, Kansas, and in the second half of next year we expect to begin cracking ethane from the Marcellus Shale basin,” Chris Bezaire, senior vice president, Polyethylene Business, told Canadian Plastics. “These changes allow us to think about the expansion of our Corunna, Ont. cracker that would support a new polyethylene facility in the Sarnia region, and a de-bottleneck of our low-density polyethylene facility in Mooretown, Ont.”


The company is waiting for approval from the Ministry of the Environment for the estimated $250-million Corunna plant revamp, which would make it capable of running with 100 per cent natural gas liquids feedstock.

Another project set to take off is an eight-kilometre Genesis pipeline from an existing St. Clair River, Ont. crossing that will deliver natural gas liquids, originating from the Marcellus Shale basin to Nova’s Corunna plant. “National Energy Board approval has been granted as of June 13, 2012, and construction is scheduled to start in early 2013, with expected start up in the beginning of the third quarter of 2013,” Bezaire said. “The pipeline extension will enable access to additional ethane for our Corunna cracker.”

Analysts see the moves by Nova and other domestic resin producers as attempts to develop low-cost feedstocks and create more widespread reshoring of manufacturing to North American suppliers before outside pressures reign them in. “The rapid development of shale gas resources in North America has helped make local producers of resins produced from large amounts of ethylene, such as polyethylene and PVC, some of the most cost-competitive resin producers in the world,” said Phillip Karig, a managing director at research firm Mathelin Bay Associates Inc. “North America has a huge head start on taking advantage of low cost shale gas, but the future will depend on how quickly other parts of the world adopt fracking technology, how long low cost natural gas can stay bottled up in North America and isolated from world energy markets, and how environmental concerns might affect North American production.”

Print this page

Related Stories

Leave a Reply

Your email address will not be published. Required fields are marked *