News For Neighbours. Update on our growth projects and community involvement. January What s Inside...

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1 News For Neighbours January 2016 As part of our commitment to Responsible Care, we consult with our communities about our facilities, operations and products in order to share information, seek input and respond to concerns. Through community advisory panels, training programs, open houses and personal visits, we strive to create open dialogue with our communities and near neighbours. What s Inside... In The Community... 2 NOVA 2020 Growth Projects... 5 Highlights of Responsible Care Verification Report... 8 Update on our growth projects and community involvement With the start of a new year, I appreciate the opportunity to update you on our business and local operations as well as our involvement with the local community during the past year. Progress continues on our NOVA 2020 Growth Projects. In December 2015, we received full investment funding from our Board of Directors to move forward with an approximately $400-million project to convert our Corunna cracker to use 100% ethane feedstock. Our Board also endorsed continued engineering on our next potential polyethylene plant that will use Advanced SCLAIRTECH TM technology. The base case is for it to be built in the Sarnia-Lambton region, tied to an expansion of the Corunna cracker. Also last year, we received Ontario Energy Board (OEB) approval for the construction of the Kimball Pipeline Replacement Project which supports the Corunna conversion to ethane. (Please see pages 6 and 7.) We are thrilled with our recently announced $2-million donation to the Lambton College Envision Tomorrow Capital Campaign. This is the largest educational donation in NOVA Chemicals history. It is an extension of our long-standing partnership with the College over the last 18 years. Since 2008, we have worked with 224 co-op students from the College and hired 118 graduates. (See page 2.) More illustrations of our ongoing commitments to the community can be found in this newsletter. Our seventh Responsible Care verification was successful (page 8) and highlighted many positive community aspects for NOVA Chemicals. We look forward to another year of working co-operatively with our community. Your input is always welcome. Tom Thompson, Regional Manufacturing Director

2 In The Community NOVA Chemicals actively invests in the well-being of our local communities. In addition to our charity of choice, the United Way, our investments focus on three core areas: Education and Science, Health and Community Service and the Arts. NOVA Chemicals proudly donates $2 million to Lambton College NOVA Chemicals Regional Manufacturing Director Tom Thompson was thrilled to announce late in October a $2-million donation to Lambton College in support of its Envision Tomorrow Capital Campaign. Our donation will help fund the soon to be built Health and Research Centre. The campaign also includes a new Athletics & Fitness Complex and an Equipment Renewal Program. NOVA Chemicals donation is the largest single corporate donation the College has ever seen, and the largest educational investment that NOVA Chemicals has made. NOVA Chemicals representatives, including CEO Todd Karran, joined Lambton College Board members, leaders, students, local dignitaries and other guests at the announcement event. Another successful United Way Campaign Our 2015 United Way Campaign raised $290,980 for the United Way of Sarnia-Lambton. This total represents the largest annual campaign for the United Way in this region s history. Numerous employee fundraising events took place during September and October in support of our local campaign. We are fortunate to have a generous company match program to assist our employee donations in going further for this very worthwhile community cause. Employees held a chili fundraising event as part of this year s United Way campaign. 2

3 Supporting Earth Day Sarnia Community Parks Clean-Up April 25, 2015 NOVA Chemicals joined the City of Sarnia Parks & Recreation Department to hold the first annual Community Parks Clean-Up Day on Saturday, April 25. NOVA Chemicals supplied the clean-up kits including garbage and recycling bags, safety gloves and first aid kits. Several NOVA Chemicals volunteers teamed up to pick up garbage and clean the local parks, public spaces and trails. Great Canadian Shoreline Clean-Up September 19, 2015 On September 19, 23 of our people, including 11 children, volunteered to clean-up Rainbow Park, Sarnia. It was a rainy day but everyone stuck it out using garbage bags as raincoats! Most notable findings were a man s boot and a jolly jumper hanging from a tree on the shoreline. Rob Thompson, NOVA Chemicals Regional Operations Leader, commented, It s not just about picking up garbage. It s about engaging our employees and their families and providing an activity with a purpose to promote civic pride. Aamjiwnaang First Nation Envirofest On July 15, NOVA Chemicals participated in the Aamjiwnaang First Nation Envirofest. This community outreach event provided a fun and informative day of environmental interactions between Aamjiwnaang community members and local companies. 3

4 Earth Rangers NOVA Chemicals was proud to partner with the Earth Rangers, Kids Conservation Organization in September. Using the power of live animals, the school outreach program travels to over 800 schools across Canada every year, teaching students about biodiversity and conservation. NOVA Chemicals reached out to its employees and used a voting system to decide which six schools would experience a visit and presentation from Earth Rangers. For more information about Earth Rangers and their programs, please visit: ww.earthrangers.org Organization for Literacy NOVA Chemicals has been a long-standing partner of the Organization for Literacy in Lambton. This is a non-profit organization serving Lambton County since This year NOVA Chemicals sponsored the Skill and Drill program. This is a program available to children in Grades 1 7 who need extra help with reading and / or math. The program teaches new knowledge and skills, and builds on what the children have already learned. It uses a variety of teaching methods to help build children s confidence and skills in reading and math. SADS Event: A Vital Training Exercise Last summer, NOVA Chemicals hosted the annual Sarnia Area Disaster Simulation (SADS) exercise at the Corunna facility. This mutual aid response exercise is an annual event that includes fire, ambulance and police responders and local industry personnel. It is a vital training activity designed to simulate a real incident and provide experience and knowledge to those taking part. NOVA Chemicals hosted the event on behalf of the Community Awareness Emergency Response (CAER) and Chemical Valley Emergency Co-ordinating Organization (CVECO). The emergency scenario involved a simulated lightning strike of a NOVA Chemicals storage tank resulting in an explosion and fire as well as associated damage and fire potential to an adjacent rail car. Sarnia-Lambton s mutual aid model of industry and municipalities working together has been duplicated around the world. We are proud to have had international representatives observe past simulations. If you would like more information, please visit the Community Awareness Emergency Response website at 4

5 NOVA 2020 Growth Projects Moore Site Proposed Projects Moore Site Emissions Reduction Project Proposed Completion 2018 The proposed Emissions Reduction Project involves installing a new regenerative thermal oxidizer (RTO) to oxidize off-gases created during the polyethylene manufacturing process. The new RTO will reduce atmospheric emissions of ethylene and other volatile organic compounds (VOCs) from the facility. Moore Site Rail Yard Expansion Project Proposed Construction Start 2016 The proposed Rail Yard Expansion Project involves increasing on-site storage capacity of rail cars by an additional 200 cars. New tracks will be installed to allow for storage of a larger inventory of empty and full cars ready to be shipped to customers. The implementation of this project will not change production volumes, air emissions or rail traffic to or from the site. Application for Moore Projects One Environmental Compliance Approval (ECA) application under the Ontario Environmental Protection Act was submitted for both of these proposed Moore projects on September 3, For further information on ECAs, visit the MOECC s website at: An Overview of Our Current Sarnia-Lambton Operations To help put the NOVA 2020 Growth Projects into perspective, here is a brief overview of NOVA Chemicals current operations in this area. The Corunna Site is a petrochemical complex that produces 1.8 billion pounds of ethylene and up to 700 million pounds of co-products annually. It began operations in late 1977 and was purchased by NOVA Chemicals in It was the first fully integrated cracker and petrochemical complex in North America. Its original processing capability was entirely crude-oil based feedstock. Through the years, the cracker has been upgraded and since 2014, after a $250-million retrofit, has been able to process up to 100% natural gas liquids. The primary feedstock is now ethane, with lesser amounts of propane and butane (see story page 6 for proposed conversion to 100% ethane). The Corunna cracker provides feedstock to NOVA Chemicals two other Sarnia-Lambton locations, Moore Site and St. Clair River Site, which convert the ethylene into up to 1.3 billion pounds of low-density and high-density polyethylene. Our customers then use these products in everyday applications such as food packaging, caps and closures, drums and heavy duty sacks. We employ approximately 1,000 permanent employees, making us one of the largest employers in the Sarnia area. We are a cornerstone of Ontario s petrochemical industry, and have invested more than $1 billion over the last 10 years into our Ontario manufacturing facilities to ensure ongoing safe and reliable operations. The growth projects we are now pursuing will help us to remain competitive in global markets. 5

6 Corunna Site Proposed Projects Kimball Pipeline Replacement Project Regulatory Approval Received We have received Ontario Energy Board (OEB) approval for the Kimball Pipeline Replacement Project, with construction scheduled to begin in the spring of be removed from the ROW. The general location of the proposed replacement NGL pipeline is shown on the map below. This Project is the first step in establishing a second pipeline connection to support our Corunna facility s recent transition to natural gas liquids (NGL) as its primary feedstock, as well as the next proposed project to convert Corunna to 100% ethane utilization by 2018 (see related Corunna stories page 7). This connection will provide us with additional feedstock sources to ensure reliable supply. This Project will replace a dormant 4 NGL pipeline with a 12 pipeline, approximately 4 kilometres in length, in an existing right of way (ROW). A dormant 8 pipeline will also In October 2014 we executed a long-term transportation agreement with Kinder Morgan to transport ethane and ethane-propane mix from the Utica Shale Basin through Kinder Morgan s previously announced Utica to Ontario Pipeline Access (UTOPIA) project. Access to Utica Shale Basin ethane will be through a series of connected pipelines including the UTOPIA pipeline, Plains Windsor to Sarnia Pipeline and NOVA Chemicals Kimball Pipeline Replacement Project. We expect the connectivity to be in service by early 2018, subject to permitting and regulatory approvals. Michigan U.S.A. Lake Huron Point Edward Sarnia Wyoming Forest Hill Street Highway 40 Highway 40 NOVA Chemicals Corunna Site Ladysmith Road Ladysmith Road Petrolia Line COUNTY OF LAMBTON TOWNSHIP OF ST. CLAIR Rokeby Line Tecumseh Road Tecumseh Road Legend KEY MAP Existing Pipeline Corridor New Valve Site Existing Valve Site Nova Chemicals Corunna Site Railway, Active Road Petrolia Oil Springs Kimball Road Kimball Road Watercourse/Constructed Drain Base features produced under license with the Ontario Ministry of Natural Resources Queen's Printer for Ontario, km The ROW is located in St. Clair Township, Lambton County. It runs just south of the northern perimeter of the 9th concession from the east side of Ladysmith Road to an existing Plains Midstream valve site west of Kimball Road. 6

7 Corunna Site Proposed Projects Continued Corunna Conversion to 100% Ethane In December 2015, NOVA Chemicals Board of Directors approved full investment funding to move forward with an approximately $400-million project to convert the Corunna cracker to utilize 100% ethane feedstock. We expect to complete a significant amount of project construction during our next scheduled Corunna turnaround in Planned completion is scheduled for The fully converted unit will use our existing ethane feedstock capacity as well as additional feedstock from a second pipeline connection through the recently approved Kimball Pipeline Replacement Project (see page 6). This project is also expected to be completed in Looking Forward: Other Projects Under Consideration We expect to have a path forward for these two potential projects in the next few years. We will continue to consult with the community and other stakeholders. Your input is welcome. Corunna Cracker Expansion We are assessing the feasibility of an expansion of the Corunna cracker integrated within the site s existing footprint. This potential Corunna expansion will be designed to produce between 7.6 to 8.0 million pounds of ethylene per day. This represents an increase of approximately 50% from the unit s current ethylene capacity. If this Project proceeds it will involve the construction of one or two new cracking heaters that use ethane as feedstock. Polyethylene Plant Utilizing our Advanced SCLAIRTECH Technology The Sarnia-Lambton region remains the base for a new polyethylene facility to expand upon our proprietary technology and to provide greater supply reliability to our customers. If we move forward with this new polyethylene facility, it will correspond with the Corunna Cracker Expansion Project. If you have any questions regarding the NOVA 2020 Growth Projects, please contact the Toll-free number: or visit the project website: 7

8 Responsible Care Responsible Care is our industry s commitment to the health and safety of people and the environment and the responsible manufacture and use of plastics. Highlights of Our Seventh Responsible Care Verification NOVA Chemicals seventh successful Responsible Care verification was conducted June 15 to June 19, 2015 with the independent verification team visiting our Sarnia-area and Alberta locations. In its assessment, the team had the opportunity to interact with a wide range of company personnel and external stakeholders. The Chemistry Industry Association of Canada (CIAC) verification team concluded the Responsible Care (RC) Ethic and Principles for Sustainability are guiding company decisions and actions, and that a management system is in place to drive continual improvement. The team s report highlighted areas for improvement and actions, which we are fully reviewing. We are developing an action plan to ensure the opportunities are addressed and that current successful initiatives are maintained. The following are some highlights from the verification team s report that we felt would be of interest to the community. Community-related highlights: All standards, procedures and practices for Emergency Management meet RC code implementation expectations. An action item related to Emergency Management and Preparedness is to ensure near neighbours understand the actions they should take to protect themselves if NOVA Chemicals or local authorities must activate a shelter in place instruction. We will build on our existing programs with neighbours to strengthen our communications in this area. In the team s opinion, the company has built and maintains an excellent community dialogue process: In all of the team s interaction with community members there was not one indication of any reluctance or hesitation on the part of the community to contact the company about any issue and to expect timely feedback. The company has developed a platform ( Taking Care ) to bring the entire organization together to put RC in practice with a focus on sustainability. The team is enthused about this initiative. It is an excellent example of bringing the complex concepts of sustainability to the shop floor... The team believes this effort leads the industry in involving employees in this complex undertaking. These regular verification processes provide us a valuable third-party perspective on how we are doing in relation to the RC codes and ethic, and sustainability. Thank you to Bluewater Community Advisory Panel (BCAP) member Daniel Hansen for being the community representative on the independent panel. Taking Care Manufacturing East Operations 785 Petrolia Line, Corunna, ON N0N 1G0 Tel.: Printed on paper made with 100% post-consumer recycled fibre. NOVA Chemicals logo is a registered trademark of NOVA Brands Ltd.; authorized use/utilisation autorisée. Responsible Care is a registered trademark of the Chemistry Industry Association of Canada (CIAC). Advanced SCLAIRTECH is a trademark of NOVA Chemicals.