Sable gas rich in plastics possibility

While still very much in the early stages of production, natural gas from Sable and other off-shore fields promises to have a significant impact on Atlantic regional and local economies, creating what officials see as attractive conditions for growth in industrial sectors such as plastics. Goldboro, N.S., for example, is the landfall point for Sable gas and home to a plant processing more than 550 million cubic feet of gas a day. Excess Sable gas exceeding contracted amounts, so-called by-pass gas, is expected to be significantly cheaper than comparable gas sold in the Northeast U.S. Low energy costs, access to major U.S. markets and the discussed, but not confirmed, construction of a $600 million ethylene/polyethylene manufacturing complex in the area, are some of the selling points regional development officials are touting in hopes of drawing plastics processors to the area.

“We see Goldboro as becoming a sort of a strategic converging point of the Maritime and Northeast U.S. gas pipelines,” says Gordon Macdonald, special projects manager, petroleum office, Guysborough County Regional Development Authority. Macdonald notes the Sable gas project, developed by Sable Offshore Energy Inc., is only one field in a collection of nearby off-shore gas reserves estimated at 37 trillion cubic feet. Exploration is on-going, and commercial development of additional gas fields is expected in the near future.

The size of gas reserves would seem to make the area a natural for a petrochemical/plastics refinery. Despite the announced interest of several groups to build such a plant, a firm commitment has not yet been made. Macdonald, however, thinks that the odds that the plant will be built are high.

“A couple of years ago there were some concerns that it might not go ahead,” says Macdonald. “However now the general feeling is not if it will be built but when.”

In order to be economical, an ethylene/polyethylene production plant would need to extract about 60 percent of the ethane from the gas, an amount which would still allow the gas supplier to meet its contractual obligation of supplying gas with a BTU value of 979.

Irving Oil Ltd has committed to eventually using about 10 percent of Sable gas at its refinery in Saint John, NB, according to director of business development, Steve Kirstiuk Irving has recently completed a major upgrade to the refinery which will allow it to enhance the quality of its yield, consisting of gas, jet fuel, propane, propylene and other products. Kirstuik says the company currently has no plans to build capacity for making polypropylene from its feedstocks.