Significant impact expected from Nova expansion
When construction of Nova Chemicals Corp.’s new polyethylene line at Joffre peaks late next year and into 2015, more than 600 workers could be engaged in the project.
For Red Deer and other communities in the area, that’s likely to translate into millions of dollars in spin-off revenues for hotels, restaurants, stores and other businesses.
“There will be a significant economic impact, I believe, to the region,” said Rick Van Hemmen, Nova’s Joffre site leader. “For accommodation costs alone, it would be reasonable to expect at least $8 million over the duration of the project coming into the region.”
Earlier this month, Nova’s board of directors approved nearly $1 billion of funding for the Joffre expansion.
About $900 million of this is earmarked for capital expenditures, of which 40 to 60 per cent is expected to be spent in Alberta, said Van Hemmen.
“Much of this 40 to 60 per cent of the capital will be for direct labour,” he said. “But we’re also looking to source materials and services — such as concrete, gravel, trucking — from Central Alberta. We may see about 20 per cent of this capital expenditure in the Central Alberta area.”
Although many of the workers needed for the expansion — most of whom will be tradespeople — will be brought in from outside the region and even the province, the preference will be to hire as many local workers as possible, said Van Hemmen.
Ledcor Projects Inc. will be the primary contractor, responsible for the new polyethylene reactor facility.
With an estimated 1.6 million hours, or 800 person years, of work required for the 29-month project, the challenge is likely to be finding enough skilled workers — especially with Alberta’s tight labour market.
“The one thing that I think works to our favour is we’re reasonably early with this project, relative to some others in the province,” said Van Hemmen.
With most of the required approvals in place, and much of the engineering and other preliminary work done, construction is expected to begin within the next few months. Completion and commissioning is expected by late 2015.
When the dust settles, Nova will have a third polyethylene reactor in its Polyethylene 1 plant. Related infrastructure will include a new pelletizer and finishing facilities, a flare stack, three cooling towers and an electrical substation. The plant’s rail yard will also be expanded.
With the new reactor able to produce an anticipated 950 million to 1.1 billion pounds (431 million to 500 million kg) of low-density polyethylene annually, the capacity of Nova’s polyethylene facilities will jump about 40 per cent from the current 2.5 million pounds (1.13 million kg).
Van Hemmen said 25 to 35 permanent jobs will result from the expansion, plus another 15 to 25 contract positions. While these figures might seem small in the context of the approximately 800 employees and 300 to 400 contractors that work for Nova — either at the complex or off-site — he cited statistics that indicate every job in the Canadian chemistry industry supports a half-dozen workers elsewhere.
Unlike previous capital projects at Joffre, a work camp will not be set up for this one. Van Hemmen pointed out that the maintenance turnarounds that occur approximately every six years at Nova’s three ethylene plants attract up to 1,000 workers over a 35- to 40-day period — many more than will be on site for this expansion project.
Turnarounds at the two polyethylene plants occur in approximately five-year intervals, but require about half the manpower.