Storms force Nova to tighten PE supply

Severe storms and high winds have shut down six natural gas plants in western Canada, causing Nova Chemicals Corp. to declare force majeure on shipments to some of its polyethylene customers. The storms hit Empress, Alberta, on June 21. The natural gas plants affected are owned by other companies, but supply ethane to Nova’s major petrochemical complex in Joffre. The outage has cut off about half of Nova’s ethane supply, which is used to make PE feedstock ethylene.

Dow Chemical Co. also operates a PE plant in the region at Fort Saskatchewan, Alberta, but Dow officials said the storms had “no material impact” on that operation. Dow receives some of its ethane supply from the affected plants, but also makes some ethane on-site and sources some from other suppliers, said Barb Korol, spokeswoman for Dow’s Canadian operations.

Nova officials said that lost PE sales volumes will be between 70 million and 120 million pounds. The plant now is at 40 percent of capacity, but is expected to return to full strength by the end of the third quarter. The financial impact on Pittsburgh-based Nova’s pre-tax earnings should be between $25 million and $50 million.