A globally competitive plastics and chemicals business begins with cost-advantaged feedstocks and production assets. NOVA Chemicals’ manufacturing facilities are among the world’s largest and most energy efficient – a significant advantage when raw materials alone represent approximately 60 - 80% of the company’s overall production costs. There are three keys to NOVA Chemicals’ global cost competitiveness:

• The Alberta Advantage
• Feedstock Flexibility
• World-Scale Assets

THE ALBERTA ADVANTAGE
NOVA Chemicals’ Alberta Advantage has historically represented an average cost-advantage of more than 6¢ per pound on the cash cost of ethylene production compared to a typical ethane/propane cracker on the U.S. Gulf Coast (USGC). Feedstocks used at the Company’s Joffre, Alberta, manufacturing facility come from local, ethane-rich gas reserves, which have historically had a built-in cost advantage relative to feedstocks used by competitors.

The main components of the Alberta Advantage are: 1) lower Alberta natural gas costs compared to the USGC; 2) the province’s low-cost ethane extraction and distribution system; and 3) lower fixed costs due to the scale and efficiency of the Company’s world-scale ethylene plants at Joffre. Approximately 75% of the Company’s ethylene is produced in Alberta.


FEEDSTOCK FLEXIBILITY
Volatile energy and feedstock costs are a reality. NOVA Chemicals’ Corunna flexicracker near Sarnia, Ontario, is built to adjust its feedstock mix between “heavy feeds” such as crude oil, and “light feeds” such as ethane or propane. This feedstock flexibility enables the site to optimize both feedstock costs and the output mix of ethylene and co-products, to maximize margins. Most competitive North American crackers do not have this flexibility. Our Joffre ethylene crackers can also adjust portions of their feedstock mix to include propane and other natural gas liquids – an advantage during seasonal propane surpluses.

WORLD-SCALE, GLOBALLY COMPETITIVE ASSETS
In the global plastics and chemicals industry, efficiency comes with scale. NOVA Chemicals’ Joffre manufacturing site is the largest ethylene and polyethylene complex in the world – its scale delivers industry-leading operational and cost advantages. In 2005, the Company’s Corunna flexi-cracker began a major modernization project to enhance energy efficiency by 15% and also expand production capacity.

The Bayport, Texas, styrene monomer manufacturing facility is the world’s largest ethyl-benzene styrene monomer production unit following its modernization and expansion in 2005. The facility’s improved energy efficiency and lower production costs position it well to take advantage of any rising demand for styrene monomer.