Nova strikes deal

Nova Chemicals Corp. has struck a deal with AltaGas Income Trust to buy ethane and natural gas liquids from AltaGas’s processing complex at Harmattan.

Nova Chemicals Corp. has struck a deal with AltaGas Income Trust to buy ethane and natural gas liquids from AltaGas’s processing complex at Harmattan.

AltaGas has applied for regulatory approval to process 250 million cubic feet of natural gas a day using spare capacity at the Harmattan complex southwest of Olds to recover ethane and natural gas liquids. If approved by the Alberta Energy Resources Conservation Board, the Harmattan Co-Stream Project will involve the building and operation of two large-diameter high-pressure natural gas pipelines and one small-diameter high vapour pressure product pipeline, as well as altering existing equipment for processing gas.

Capital costs are estimated at $100 to $120 million.

On Monday, AltaGas announced that it has entered into a memorandum of understanding with Nova for the petrochemical company to purchase the gas stream products for an initial term of 20 years.

Nova uses ethane and other natural gas liquids to produce ethylene, which is in turn used to make plastics.

“The Harmattan Co-Stream Project will allow AltaGas to realize an initial incremental 250 Mmcf/d of existing processing and extraction capacity at our highly efficient Harmattan complex,” said David Cornhill, chairman and CEO of AltaGas, in a news release. “Furthermore, the Harmattan Co-Stream Project will expand the availability of valuable feedstock for Alberta’s petrochemical industry, and retain extraction revenues and value in Alberta in a most economical manner.”

The memorandum of understanding is subject to a number of conditions.

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