MOSCOW (MRC) -- The Chemistry Industry Association of Canada estimates that its members' aggregated operating profit fell 21% last year, while overall sales declined 3%, or were flat in constant dollar terms, said Leaderpost.
In fact, the Canadian petrochemicals industry is short on ethane - a key natural gas component and vital ingredient for chemicals producers.
Natural gas drilling activity was down 23% in Canada, which meant the industry is short on ethane, while ethylene-based derivative units are also running under capacity.
Canadian petrochemical exports to the U.S. - its biggest market - are estimated to have fallen 9% last year, and are forecast to decline a further 4% this year as the U.S. chemicals industry rises once again.
After decades of high and volatile natural gas prices that "destroyed industrial demand," shale gas offers a new era of U.S. competitiveness that will lead to greater investment and employment, says the American Chemistry Council.
Dr. Thomas Kevin Swift, chief economist and managing director of the ACC, says the council's members are working on more than 60 projects with a value of USD43-billion in capital investment. "It is a game changer," he said.
Fixed capital expenditures over the past two years have shot up considerably, and are expected to hit USD2.7-billion in 2013, the highest investment outlay the industry has seen in well over a decade. Companies are getting innovative and importing ethane from North Dakota and Marcellus shale, and recovering off-gases from bitumen upgraders, according to CIAC.
As MRC wrote earlier, Nova's polyethylene investments are in Canada. These include a USD1-billion polyethylene project expansion near Red Deer, Alta., and a USD250-million conversion of its Corunna cracker facility in Ontario to natural gas liquids to take advantage of the low-gas environment.
Petrochemicals giant Dow Chemical Co. is so worried about losing the United States' low natural gas price advantage that it is pulling out of a USD6.5-billion proposed LNG export plant at a Texas terminal it owns partially. It even quit a manufacturing trade group last week which supports U.S. gas exports, as it fears exporting gas "indiscriminately" would lift natural gas prices.
MRC