June 24, 2005 by Canadian Underwriter
NOVA Chemicals Corp. (TSX: NCX) continues to work to mitigate the impact of the severe weather-related shutdown of six natural gas processing plants owned and operated by third parties at Empress, AB.
Production at the Compnay’s Joffre, AB manufacturing site is slowing due to reduced ethane availability. The Alberta site is currently only operating at approximately 40% of capacity.
The processing plant’s operators say NOVA expects to build up to its full supply of ethane for production of ethylene, polyethylene and co-products before the end of the third quarter. The total earnings impact of the outage is expected to be from $25 to $50 million pre-tax ($15 to $30 million after-tax). It is likely that impacts above this cost range will be covered by insurance.
NOVA says that it is working closely with affected ethylene, hydrogen and polyethylene customers to manage the impacts of this force majeure event. NOVA Chemicals’ lost polyethylene sales volumes are expected to be in the range of 70 to 120 million pounds (CD$157 to CD$270 million).