PR Newswire U.S.
Williams Signs Long-Term Agreement to Produce Up to 17,000 Bpd of Ethane/Ethylene for NOVA Chemicals
Mon Mar 28 2011, 8:30am ET
TULSA, Okla., March 28, 2011 /PRNewswire/ --Williams (NYSE: WMB) announced today that it hassigned a long-term agreement to produce up to17,000 barrels per day (bpd) of ethane and ethylenefor NOVA Chemicals Corporation in Alberta,Canada.Williams plans to invest CA$311 million to expandits two primary facilities in Alberta to support thenew agreement. The expansions, which are expectedto begin operating in first-quarter 2013, will allow thecompany to produce ethane and ethylene from itsoperations that process off-gas from the Alberta oilsands.Fort McMurray, Redwater Facilities to be ExpandedThe expansions involve modifying and upgradingtwo facilities. Williams will modify its oil sandsoff-gas extraction plant near Fort McMurray, Alberta,and construct a de-ethanizer at its Redwater naturalgas liquids (NGL)/olefins fractionation facility nearEdmonton, Alberta.The upgrades at Fort McMurray will allow Williamsto include ethane and ethylene in the NGL/olefinsmixture that the company extracts from the off-gasand delivers to Redwater for fractionation.The new de-ethanizer at Redwater will then enableWilliams to initially produce approximately 10,000bpd of an ethane/ethylene mix. This will add to itscurrent production of approximately 14,000 bpd of aheavier NGL/olefins mixture that includes propane,propylene, butane, butylenes and condensate. Futureexpansions are expected to further increaseethane/ethylene production.Under the terms of the new agreement, Williams isdelivering the ethane/ ethylene mix produced atRedwater into the Joffre Feedstock Pipeline (JFP).NOVA Chemicals is delivering the product via JFPinto its Joffre facilities."These expansions will add incremental ethanesupplies in Alberta, which are high-demand productsfor the petrochemical industry in Canada," said RoryMiller, president of Williams' midstream business."It's a significant growth opportunity for ourCanadian midstream business, as we're uniquelypositioned as the only company with off-gasexperience and facilities in the region."The new operations will also further reducegreenhouse gas and sulphur dioxide emissions fromthe oil sands operations," Miller said.The Government of Alberta recently modified theIncremental Ethane Extraction Program to provideincentives for the extraction of ethane from the oilsands in order to bring new supplies of secure,long-term ethane feedstock to Alberta'spetrochemical industry."I'm pleased to see that Williams is the first of what Ibelieve will be many companies to benefit from therecent changes to our ethane policy," said AlbertaEnergy Minister Ron Liepert. "The value-addedindustry in the province is important, allowingAlbertans to get the most out of the provincesresources - whether in investment capital, exportedproducts or jobs."The expenditures associated with these expansionswere included in previous capital expenditureguidance, which was issued on Feb. 17.Williams' Operations in Canada: InnovativeBusiness, Emissions ReducerWhen producers convert the Canadian oil sands intousable oil, the process produces an off-gas byproductthat includes a rich mixture of natural gas, NGLs andolefins. Williams pioneered the process of extractingthe mixture from the off-gas at its Fort McMurrayfacility, which is located on-site at a third- partyoil-sands production facility.After it extracts the off-gas mixture, Williams returnsthe natural gas to the third-party oil-sands producerfor its operations. It then transports the remainingNGL/olefins mixture to its Redwater facility outsideof Edmonton.At Redwater, Williams separates the NGL/olefinsmixture into marketable products and removes thesulphurs. Currently, the facility produces the highestquality of propylene produced in Canada, as well aspropane, butane, butylenes and condensate. When theexpansions are placed into service, the facility willalso produce ethane and ethylene.Williams' off-gas processing reduces emissions of carbon dioxide (CO2) - a greenhouse gas - in Albertaby approximately 200,000 tons each year and cutsemissions of sulphur dioxide (SO2) - a contributor toacid rain - by more than 4,200 tons each year. Thenew expansions will further reduce both carbondioxide and sulphur dioxide emissions in Alberta.NGL Pipeline to Support ExpansionsWilliams is currently constructing a 261-mile (420km), 12-inch NGL pipeline from its Fort McMurrayextraction facility to its Redwater fractionator. Thepipeline is designed to support the company'sgrowing business in Canada.