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New petrochemical plant will help diversity Alberta’s energy exports

December 18, 2017

 

The Government of Alberta has been very focused, especially in light of plunging crude oil prices, on diversifying our economy. That includes encouraging a diversity of energy products. Now, a $3.5 billion private-sector investment is moving forward, with help from Alberta’s Petrochemicals Diversification Program (PDP).

The final investment decision by Calgary-based Inter Pipeline will see two new facilities built in the Industrial Heartland, near Fort Saskatchewan, that will process propane into value-added plastics products. At the peak of construction, an estimated 2,300 direct full-time jobs will be created and once complete, the facilities will employ 180 people full time.

Inter Pipeline was approved to receive royalty credits under Alberta’s Petrochemicals Diversification Program, which was created as part of the Alberta Jobs Plan to encourage companies to invest in the development of new petrochemicals facilities in the province.

 

Construction of the new propane dehydrogenation (PDH) facility and polypropylene facility will begin in spring 2018, with operations starting by the end of 2021.

The complex will process about 22,000 barrels per day of Alberta propane into propylene, which will then be processed into the more valuable polypropylene that is used around the world to manufacture of a variety of plastics products, including packaging for consumer products, reusable containers and automotive parts.

Preliminary work at the project site is underway, as is detailed engineering and design work.

“Alberta is an ideal location to construct a world-scale, propane-based petrochemical operation due, in part, to the meaningful incentives provided by the Petrochemicals Diversification Program. Driven by attractive feedstock and utility costs, Inter Pipeline’s Heartland Complex is expected to be one of the lowest-cost polypropylene producers in North America.”

Christian Bayle, president and CEO, Inter Pipeline

Inter Pipeline’s PDH project was one of two proposed petrochemical projects selected in December 2016, through a competitive application process, to receive up to $200 million in royalty credits.

Another project, Canada Kuwait Petrochemical Corporation’s (CKPC) integrated PDH and polypropylene facilities, was approved to receive up to $300 million in royalty credits. CKPC recently began the process to have front-end engineering design work done for its project and is expected to make a final investment decision in late 2018.

Under the PDP, projects will receive royalty credits only after the facility has been constructed and is in operation.

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