Novacor Chemicals, a unit of Nova Corp., Calgary, plans to spend $85 million (Canadian) to expand and upgrade petrochemical facilities in Alberta, Ontario, and Michigan.
Novacor approved the capital program after adopting some of the recommendations from a study of competitive strengths and growth prospects for each of its chemicals and plastics businesses.
JOFFRE PLANS
Novacor plans a $50 million debottlenecking at its Joffre, Alta., olefins complex that will increase ethylene capacity by 115 million lb/year to 3.3 billion lb/year and linear low density polyethylene (Lldpe) capacity by 200 million lb/year to 1.2 billion lb/year.
As a result of the debottlenecking, Novacor's consumption of natural gas will increase about 3% from the current volume of 320 MMcfd. The joffre plant accounts for almost 60% of Novacor's total gas consumption of about 550 MMcfd.
Novacor Pres. John Feick said the Joffre ethylene operation has a competitive advantage over other North American producers because of production costs that are expected to remain low. It also offers a secure, low cost supply of ethylene feedstock for growth in derivatives such as polyethylene (PE). Novacor's study also found the Lldpe business at joffre has a highly competitive cost structure and attractive markets.
Meantime, Novacor's PE business management is defining the nature and scope of bigger PE expansions in the second half of the decade.
OTHER PLANS
Novacor is targeting other opportunities to boost profits at its Corunna olefins complex near Sarnia.
It is trying to rationalize the slate of feedstocks at the complex to interact better with nearby refineries. And Nova approved a $25 million project to further upgrade one of the coproduct chemical streams, although Novacor did not disclose what that will entail. That project is to begin early in 1993 as soon as arrangements for product sales are complete.
In addition, Novacor plans to spend $10 million to boost capacity by more than 10% at its Medicine Hat, Alta., methanol plant. It cites growing demand for methanol as a feedstock for gasoline additives, notably methyl tertiary butyl ether.
Novacor plans to improve profits at its Marysville, Mich., polypropylene business by focusing on production of higher performance copolymers and thermoplastic resins that command higher prices and are a more attractive and stable market than commodity resins.
Feick cited an especially difficult challenge in restructuring and improving operations at Novacor's Sarnia styrene business. "There is a possibility that newly developed process technology from our Houston based process development center will assist that effort," he said.
"In addition, joint venture arrangements for a U.S. supply of styrene from a new, highly cost competitive facility in Texas will become operational later this year.
"Novacor is benefiting from rationalization of its polystyrene facilities through closure of uneconomic plants and expansion of plants that have a leading cost position. Increased investment in new product research is expected to be key influence on profitable growth, and we expect the polystyrene business to play a larger role in Novacor's future."
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