Aux Sable Canada And Dow Chemical Canada Announce Oil Sands Off Gas Ethane Sale Agreement And Strategic Alliance
Calgary,Canada - Aux Sable Canada Ltd. ("Aux Sable") and Dow Chemical Canada Inc. ("Dow") announced that they have entered into an agreement relating to the long-term sale of an ethane/ethylene stream from Aux Sable's Heartland Offgas Plant ("HOP").
Aux Sable will be the first company in Canada to extract ethane and ethylene from an upgrader off gas stream. Aux Sable will produce the ethane feedstock at the Heartland Offgas Plant ("HOP"), which is currently under construction. Feedstock for HOP will be provided by BA Energy's Heartland Upgrader. HOP will be located on land recently acquired by Aux Sable directly north of Dow's Fort Saskatchewan facilities.
To be developed in phases, HOP will produce a mixture of ethane/ethylene, a mixture of propane/propylene and heavier hydrocarbons, and a residue gas stream composed primarily of methane. Up to 8,000 bbl/d of ethane/ethylene will be produced at the facility and sold to Dow under this long-term arrangement. This project demonstrates a commitment by both companies to value-added upgrading in Alberta and is expected to be one of the first to be submitted by Dow for consideration under the new Government of Alberta Incremental Ethane Extraction Policy.
The HOP facility will have no SO(2) emissions and limited NO(*) emissions. In addition, treating and processing the off gas and using lean gas as fuel will lead to a 12 to 16% reduction in upgrader CO(2) emissions over using unprocessed off gas as fuel.
Coinciding with the HOP sale agreement, Sable NGL Canada Ltd. ("Sable Canada"), an affiliate of Aux Sable, and Dow announce that they have entered into a strategic alliance for the development of processing facilities for upgrader off gas in order to recover valuable hydrocarbon feedstocks. Dow and Sable Canada will work jointly with Alberta upgraders and refiners to develop off gas projects that will produce feedstock for Dow's petrochemical facilities in Fort Saskatchewan. Under the arrangement, Sable Canada will construct, own and operate the off gas processing facilities, while Dow will be the exclusive buyer of the ethane/ethylene streams produced at the facilities.
"A key element of our strategy is to be a leader in the processing of upgrader and refinery off gas. We believe that this alliance with Dow strengthens our ability to aggressively pursue this growth industry, and we are excited about the relationship," said W. J. (Bill) McAdam, President and CEO of Aux Sable Canada and Sable Canada.
"Our alliance with Sable Canada allows us to secure a long-term supply of petrochemical feedstock," said Jeff Johnston, President of Dow Chemical Canada. "The oil sands represent a large, untapped feedstock source for Dow's Alberta operations."
Aux Sable Canada and its US affiliate, Aux Sable Liquid Products ("Aux Sable", www.auxsable.com) are owned by Enbridge, Fort Chicago Energy Partners and Williams. Sable Canada is owned by Enbridge and Fort Chicago Energy Partners. Aux Sable and its affiliate Sable Canada intend to leverage their position as a significant player in the natural gas processing and natural gas liquids businesses through fee-based infrastructure investments.
SOURCE: Aux Sable Canada Ltd.