|
Nova wants Alberta to counter loss of gas liquids to U.S. markets Warns that unless playing field is leveled, petrochemical industry’s potential to grow will be inhibited; unhappy that Alliance ships liquids directly to U.S. Midwest Gary Park PNA Canadian Correspondent
Nova Chemicals Corp., one of North America’s top petrochemical companies, is mounting a case for the Alberta government to prevent the loss of natural gas liquids to U.S. rivals.
Pittsburgh-based Nova has called on the province to change its royalty structure and improve access to liquids-rich gas to ensure the viability of the petrochemical sector in Alberta.
Jeffrey Lipton, president and chief executive officer of Nova, said the issue facing Alberta is whether it will “have enough ethane available for the industry to continue to grow.
He told Nova’s annual meeting in Calgary May 16 that his company may invest billions of dollars in Alberta plants, but unless it can obtain more ethane it can hope for no more than “small incremental expansions.”
For the past three years, Nova and Dow Chemical have been warning that pipelines carrying raw gas from Alberta to U.S. markets are a threat to existing and future petrochemical operations. Alliance carries liquids The issue boiled over when the National Energy Board allowed the Alliance pipeline from northeastern British Columbia to carry up to 1.5 billion cubic feet per day directly to the U.S. Midwest without first having the liquids extracted.
The Alberta government has given repeated assurances that there will be sufficient feedstock for the province’s petrochemical plants, but Lipton has insisted that changes are needed to the royalty structure to entice the energy industry to keep the liquids in Alberta.
Currently, royalties paid on gas liquids left in the province are higher than royalties paid if those products are shipped along with natural gas to the U.S.
“We’d like to build large expansions and new facilities, but we can’t do that if ethane is going to continue to roll down the Alliance pipeline and out of the province,” said Lipton. No government mandate He does not want the Alberta government to mandate that gas liquids remain in Alberta.
“But I think they should think about how we can generate more liquids-rich natural gas in Alberta and have more of the ethane extracted in Alberta,” he said. “There are ways and I think the government is thinking about it.”
Lipton told Nova’s annual meeting last year that he favor royalty changes that “ensure that ethane, propane and butane have the same royalty whether they are extracted or exported in the province. In fact, I’d have a lower rate for extraction in the province.”
Alberta Premier Ralph Klein has already said that the province must have access to liquids in any gas from Alaska or the Mackenzie Delta that is being carried across Alberta to the Lower 48.
| 