Polyethylene producer Nova Chemicals (Calgary, AB) says it has signed a memorandum of understanding with Hess Corporation and Mistral Energy to purchase ethane produced by Hess in North Dakota and transport it to its Joffre petrochemical complex in Alberta, Canada using a pipeline that will be built and owned by Mistral's affiliate Vantage Pipeline.
Nova CEO Randy Woelfel called the move an exciting opportunity for both his company and the province of Alberta as it is the first time liquids from the Williston Basin will flow north and tie into existing Alberta infrastructure. "We also expect to have opportunities to work with other producers in the basin to move additional ethane volume," he said.
Hess is one of the largest lease holders in the Williston Basin, which straddles western North and South Dakota, eastern Montana, and southern Sasketchewan. The company plans an aggressive drilling program in the area over the next several years.
Initial pipeline capacity is planned to be about 45,000 barrels/day of ethane, expandable to about 60,000 barrels/day to handle supply from other Williston Basin producers. The pipeline is expected to start up in the third quarter of 2012, subject to receipt of regulatory and other approvals. This arrangement is one of several projects that Nova is working on to complement the traditional ethane sources in Alberta for consumption at the Joffre complex.