Nexen Chemical Evaluates Next Sodium Chlorate Expansion

---

Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Nexen Chemicals Incorporated (Calgary, Alberta) a subsidiary of Nexen Incorporated (NYSE: NXY) is planning to expand their production of sodium chlorate in 2004. The question is where? Nexen is evaluating expansion plans in Brandon, Manitoba and Brazil.

An expansion at their Brandon plant is very likely and several options including the relocation of their idled 115,000 metric ton per year sodium chlorate plant in Taft, Louisiana or the addition of another production unit are all being considered. Nexen also operates a sodium chlorate and chlor-alkali plant in Brazil that could be home to the new capacity, supporting efforts to become the leading bleaching chemical producer in South America.

Nexen has expanded the Brandon site several times in recent years with the most recent being a 70,000 metric ton per year expansion completed last year that was designed and constructed by Aker Kvaerner Chemetics in Vancouver, British Columbia. Prior to that was a smaller expansion completed in 2000 and managed by NORAM Engineering & Constructors Limited also of Vancouver.

Nexen's plant in Taft is being closed largely due to the price of natural gas and energy costs in the region. "With a near adequate supply of sodium chlorate in the U.S. market currently and the much cheaper cost of energy in both Canada and South America, an expansion in both regions is likely," commented Trey Hamblet, Chemical Group Manager with Industrialinfo.com.

Sodium chlorate's primary use is for pulp bleaching as pulp producers strive to eliminate or reduce the use of chlorine in the bleaching process. Canadian producers make up nearly 60% all sodium chlorate produced in North America with the US as the second.