Between shale gas and renewables — The age of naphtha might be coming to an end. The transition from crude oil to gas-based production, and the search for biobased feedstocks for both energy and basic chemicals, are the two faces of tomorrow’s industry.
He who comes too late will be punished by life — the chemical industry is undergoing a rapid transition. Crude based naphtha is no longer the predominant feedstock for energy and basic chemicals, as natural gas and bio-materials shape the industry’s future. Established companies change their production cycles, value chains or their business models while new players emerge with revolutionary technologies.
These trends will alter the industry radically. Even traditional petrochemical clusters are feeling the wind of change — clusters such as the Sarnia region in Ontario, Canada.
The city near Lake Huron has been a center of refining and petrochemicals since the discovery of oil in 1858 — now it wants to be a trailblazer for tomorrow’s industry. Situated among Canada’s corn belt and with access to the North American gas supply, the region is a perfect example of industrial transition in a nutshell. A transition, that is well underway …
Goodbye, Naphtha – Hello Ethane
Tom Thompson, manufacturing leader of Canadian Nova Chemicals, has something unusual for sale: a fully functioning crude oil cracker. Although the unit is disassembled, it is still in premier working condition, Thompson says. Yet, Nova does not need a crude unit any more: The company is a first mover in terms of raw materials.
In 2013, Nova’s Corunna site, about ten miles from Sarnia, started processing ethane from US shales as a feedstock for petrochemicals. Since then, Thomson has not looked back: In late 2014, the operators at Corunna ran the last barrel of crude through the cracker. Now, the whole site runs 100 % on ethane from the Marcellus Shales.
Although the decision to upgrade the cracker for US $ 250 million was made in 2011 when crude prices were much higher, Thompson is pleased with the outcome. “My boss keeps asking me when would we start putting the crude unit back together — and I tell him we wouldn’t, even if they gave us the stuff for free”, he explains jokingly.
Ethane is more versatile, cost effective and reliably supplied by pipelines. Now, a proposed Phase 2 expansion shall further increase capacities by 50 % until 2019.
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