Trade Resources Industry Views Development of a Grassroots LNG Industry Will Be a Key Factor

Development of a Grassroots LNG Industry Will Be a Key Factor

The development of a grassroots LNG industry in western Canada's British Columbia will be a key factor in companies finalizing plans to invest in new petrochemical ventures in neighboring Alberta, industry officials and producers said late Tuesday.

Steve Lewandowski, senior business director for global ethylene with IHS Chemical, said driven by the shale gas boom in North America while six new crackers are planned to be built in the US by 2017, Alberta is lagging behind in the game.

"Investments by upstream players in Canada's LNG sector will push the construction of crackers, but the dithering about LNG projects in British Columbia has to stop," he said at the CERI 2013 Annual Petrochemical Conference in Kananaskis on the outskirts of Calgary.

Leading LNG players like Shell, Chevron, Apache, Petronas, to name a few have separately proposed grassroots export facilities in British Columbia, but none has yet taken a final decision.

Graeme Flint, vice president of olefins business development for Nova Chemicals Corp., said doubts still remain about the availability of additional ethane supplies in the province.

"LNG [in British Columbia] is being touted as an option, but the industry has to grow first," he said at the same conference, adding Canada will face competition from other emerging producers particularly Mozambique and Australia.

Nova Chemicals is the operator of two polyethylene trains in Joffre, central Alberta that can produce 1.48 billion lb/year (671,000 mt/year) and 950 million lb/year.

Tyler Edgington, director of feedstocks for Dow Chemical Canada, said with natural gas drilling activity declining in Alberta, a lack of available new ethane feedstock will affect the setting up a new cracker in the province.

"Besides LNG, independent producers are developing the shale gas plays in the WCSB [Western Canadian Sedimentary Basin]," Skya Kruithof, lead commercial manager for feedstock and commodity risk management of Dow Chemical Canada, said at the same event. "But there will be a need on their part to produce gas at a competitive price. We will adopt a wait-and-watch policy for now, before building a new cracker in Alberta."

Despite the challenges, Justin Riemer, assistant deputy minister at Alberta's Department of Enterprise, said the province remains optimistic of attracting investments in the downstream sector.

"We are talking to several companies who have expressed interest to invest in the ethane and propane value chain," he said at the same event.

An additional 110,000 b/d of offgas is likely to be available from Alberta's fledging oil sands sector and midstream companies are also working on projects to recover additional NGL volumes in Alberta over the next few years, Riemer said.

Offgas is a mixture of hydrogen and light gases, including ethane, butane, propane and butylenes produced from oil sands operations and also when bitumen is upgraded to synthetic crude oil.

Source: http://news.chemnet.com/Chemical-News/detail-1976355.html
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LNG Projects Key to Petchem Investments in Canada's Alberta: Producers
Topics: Chemicals