Status: The call for applications closed Oct. 1, 2018. Initial screening is underway.
Ministry responsible: Energy

Overview

The Petrochemicals Diversification Program will provide up to $1.1 billion in royalty credits to encourage companies to build manufacturing facilities that turn feedstocks into more valuable products, such as plastics, fabrics and fertilizers.

Petrochemical manufacturing is the largest manufacturing sector in Alberta – thanks to our large supply of natural gas and natural gas liquids. It directly employs more than 7,500 people and exports $8.2 billion worth of goods each year.

Applications for the second round of the program closed on October 1, 2018.

This program is one of the 3 pillars of the Energy Diversification Act. The other two programs are:

Eligible projects

Round 2 will accept proposals for projects that involve the following value chains:

  • ethane - used to create components needed for plastics, detergents, lubricants and other household products
  • methane - used primarily as fuel and to manufacture chemicals like ammonia
  • propane - used for heat and fuel and to create components needed for manufacturing plastics

Applications to increase production at existing facilities will also be accepted.

How it works

Approved projects will be awarded royalty credits after the petrochemical plants are built and operational. A total of $1.1 billion is available.

While petrochemical facilities do not pay royalties, they can trade royalty credits with oil and natural gas producers who do. The producers can use these credits to reduce its royalty payment to offset the cost of extracting natural gas and oil.

How to apply

The call for applications is now closed and initial screening is underway. The deadline was October 1, 2018.

Review the application guidelines for information on eligible projects, financial incentives and application requirements.

After you apply

Applications will be reviewed with a third-party monitor to ensure a fair and transparent evaluation process.

Applications that pass the initial screening criteria will be evaluated against a set of 8 major criteria. Applications will be ranked by performance.

The top ranked projects may then be engaged in negotiations to be considered for approval under the program.

Approved projects may be announced in late 2018 or early 2019.

Round one results

Two projects were selected under the first round of this program, which was announced in 2016.

The projects attracted more than $6 billion in new private investment and will create up to 4,200 jobs during construction and 240 full-time jobs once operations begin.

  • Construction has started on a $3.5-billion facility in the Industrial Heartland. Calgary-based Inter Pipeline will receive up to $200 million to build an integrated petrochemicals complex that will process propane into value-added plastics products. Watch the video.
  • Engineering design work is underway on an integrated propane dehydrogenation and polypropylene facility. Canada Kuwait Petrochemical Corporation was approved to receive up to $300 million. A final investment decision is expected in early 2019.

Contact

Email: energy.edprograms@gov.ab.ca

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