The Alberta Petrochemicals Incentive Program (APIP) is a key part of Alberta’s Recovery Plan and the Natural Gas Vision and Strategy to turn the province into a top global producer of petrochemicals. It provides grants to companies to attract investment in new or expanded market-driven petrochemical facilities.
The Alberta Petrochemicals Incentive Program will enhance certainty and flexibility for investors and cut red tape to attract investment into Alberta’s petrochemicals sector. Alberta has a tremendous opportunity to capitalize on the growing global petrochemical sector and diversify the province's economy, with our abundant natural gas reserves and a competitive, investor-friendly business environment.
The Program Guideline provides companies considering investment in the sector with detailed information about the program.
Key features of the program include:
- A 5 or 10-year program period, depending on the scope of the project, during which eligible projects must be built and operational to receive funding.
- An open and transparent approach, whereby every project submitted that meets the program’s criteria will receive funding once built and operational.
- Grants worth 12% of a project’s eligible capital costs will be issued to companies after projects are operational. Grants allow companies to account for the full value of the incentive provided when calculating their project’s return on investment.
- Better alignment with typical investment cycles by making funding available throughout the program’s duration.
The full eligibility criteria are available in the Program Guideline document. Applicants should always refer to the Program Guideline when making decisions on a project or seeking information on the program.
Eligible projects must meet these criteria, as well as those outlined in the Program Guideline:
- The project must be physically located in Alberta.
- The capital investment must be at least (CAD) $50 million.
- The facility must use natural gas, natural gas liquids, or petrochemical intermediaries such as ethylene, propylene, benzene etc. in the manufacturing of its own products.
- The project must create permanent jobs in Alberta.
Both new facilities, as well as brownfields and expansions on existing facilities, will be eligible for the program.
Not all capital costs associated with a project are eligible for reimbursement as part of the grant process. Costs eligible for reimbursement under APIP are related to manufacturing and processing capital expenditures.
Applicants should refer to the Program Guideline to determine which costs will be eligible.
Application and Process
Companies can apply to the program through the Electronic Transfer System (ETS). Companies will first have to register for an APIP account through the ETS. Follow the Registration Guide (PDF, 1.3 MB) to help complete your registration.
The application and grant process is broken down into three stages:
- Stage 1: Advance Notification
- Stage 2: Qualification and Grant Agreement
- Stage 3: Payment
Currently only the first stage, Advance Notification, is open for applicants on the ETS. Stage 2 will be opened shortly, once project applicants have been invited from the program to apply for the qualification stage.
Stage 1: Advance Notification
The advance notification stage allows interested companies to learn if their project will be eligible for the program, and to determine a high level estimate of how much grant funding they may be eligible to receive.
Companies will be asked to provide the following, in addition to other information:
- Company information
- Project location
- Project type
- Estimates for total costs, eligible capital costs, and job creation
Stage 2: Qualification and Grant Agreement
At this stage, businesses will be required to provide more information about the proposed project, including:
- Business Plan
- Project Timing
- Technology Configuration
- Proponent’s Capability
- Economic Benefits to Alberta, and
- Environmental Performance
In addition, a minimum of a Class 3 capital cost estimate will be required. This estimate will be used to calculate the amount of the grant. If the project is deemed eligible, the Government of Alberta will then enter into a grant agreement with the company.
If the project’s capital costs calculated in Stage 2 increase as the project goes through construction, the size of the grant will not be increased. However, if the project comes in under budget, the size of the grant will be decreased proportionally to the lower cost.
Stage 3: Payment
The payment schedule will depend on the size of the project. Smaller projects (with total capital investments between CAD $50 to $150 million), must be completed and operational within five years of the opening of applications (October 30, 2020). These smaller projects will receive their grant funds within one year of the project’s completion.
Larger projects (with total capital investments greater than $150 million), must be completed and operational within ten years of the application opening. These projects will receive grant payments in equal instalments over 3 years.
The criteria for when a project is considered complete and operational is outlined in the Program Guidelines.
Petrochemical Diversification Program (PDP) Applicants
Projects that were approved to receive royalty credits under the first and second rounds of PDP may transfer their projects to APIP if they choose. Proponents of these projects will have 6 months from the launch of the program to indicate their choice. See the guideline for more information on participation under APIP.
Projects that submitted proposals under PDP but have not yet received approval may also apply for APIP instead.
If they choose to participate in APIP, the rules governing APIP, including the determination of the total grant amount, would apply to their project.
Alberta is already home to Canada’s largest hydrocarbon processing region, with established and potential petrochemical manufacturing centres in Alberta’s Industrial Heartland Grande Prairie, Joffre and Medicine Hat.
The Alberta Industrial Heartland Association estimates that Alberta has the potential to grow the sector by $30 billion in the next ten years, resulting in more than 90,000 direct and indirect jobs over that period.
New program to make Alberta a petrochemicals powerhouse (July 9, 2020)
Connect with the Alberta Petrochemicals Incentive Program:
Email: [email protected]
9945 108 Street NW
Edmonton, AB T5K 2G6