Nova Chemicals has signed a memorandum of understanding with Hess Corporation and Mistral Energy to buy and transport all the ethane produced from Hess's Tioga Gas Plant in North Dakota via a pipeline to Alberta, Canada under a long-term arrangement. The pipeline is expected to start up in Q3-2012 and is subject to regulatory and other approvals.
Declining production of ethane in the province has driven the contract with Hess, wherein Mistral will design, construct, own and operate the proposed Vantage Pipeline. The initial pipeline capacity is planned to be approximately 45,000 bpd of ethane with the potential for expansion to about 60,000 bpd to handle future ethane supply from Williston Basin producers. This arrangement is one of several projects by Nova Chemicals to complement conventional ethane supply sources in Alberta for its Joffre petrochemical complex, with a capacity to produce 4.8 bln lbs/year of ethane-based ethylene and 860 million lbs/year of polyethylene at Joffre. Alberta ethane production, stripped from natural gas streams, has fallen to 222,000 bpd, down from 240,000 bpd.