A Houston company proposes to construct a polyethylene resin factory on the east coast of Canada.
Sable Petrochemical plans to spend around US$400 million on an ethylene/polyethylene plant capable of producing about 500 million pounds per year of PE resin, according to Paul McEachern, spokesman for the Nova Scotia Petroleum Directorate.
The plant would be well situated to supply processors on the U.S. East Coast.
McEachern said in a telephone interview from Halifax, Nova Scotia, that Sable hopes to start up the plant in 2002. It will rely on ethane and other gas liquids stripped from natural gas from the offshore Sable Island gas field.
A consortium led by Mobil Oil Corp. is developing the Sable gas field and plans to begin shipping gas to Goldboro, Nova Scotia, next November. It will fractionate the gas liquids at a facility in Point Tupper, Nova Scotia.
Sable Petrochemical hasn't chosen a site for its plant, but government officials expect it will be in the Canso Strait area, a Nova Scotia region with high unemployment.
McEachern stressed that government money won't be involved in the petrochemical plant. Sable Petrochemical is negotiating pricing for ethane which it will convert into ethylene. McEachern said the province will insist on fair market value for ethane.
``The government retains the right to possess ethane if there is any development,'' McEachern noted.
The Sable gas consortium plans eventual production of 500 million cubic meters of natural gas a year. Officials did not disclose its ethane content.
Other companies have shown interest in a petrochemical plant related to Sable gas but McEachern would not disclose them. Other major partners in the Sable gas consortium are Shell Oil Co., Imperial Oil Ltd. and Nova Scotia Resources Ltd.
Sable is headed by petrochemical industry veteran James Cutler and other investors. Consulting firm Petral Worldwide Inc. headed by Daniel Lippe, is helping with the project.
Neither Cutler nor Lippe could be reached for comment. Sable announced the project at the New England-Canada Business Council Conference in Boston, Mass., on Nov. 6, according to a Canadian Press article.