The economy will get a substantial boost from two projects that would, for the first time in Alberta, process propane extracted from natural gas resources into value-added plastics products that people all over the world use every day. The projects have been approved to receive royalty credits under Alberta’s Petrochemicals Diversification Program, which was announced and began receiving applications in February 2016.
The first project is a joint venture between Pembina Pipeline Corporation and Petrochemical Industries Company (PIC), which has been approved to receive up to $300 million in royalty credits to build an integrated propylene and polypropylene facility in Alberta’s Sturgeon County. The project is expected to cost from $3.8 billion to $4.2 billion to build.
During construction of the Pembina/PIC facility, there would be an average of 2,000 to 2,500 workers on site, with more than 150 full-time operations and head office jobs upon completion. The facility would process about 22,000 barrels per day of propane into polypropylene, the plastic material used in the manufacturing of a variety of products such as automobile parts, containers and Canadian bank notes. Construction is expected to start in 2019, with the facility operating by 2021.
The second project, by Inter Pipeline, has been approved to receive up to $200 million in royalty credits to build a $1.85-billion facility in Alberta’s Strathcona County. At the peak of the three year construction phase 2,000 full-time equivalent jobs would be created. About 1,600 of those would be at the site and the rest would be in fabrication or module shops and engineering firms. An additional 95 full-time operations positions would be created upon project startup.
The Inter Pipeline facility would process about 22,000 barrels per day of propane into propylene, a feedstock for the production of polypropylene and other derivatives. Construction is expected to start in 2017, with the facility operating in 2021.
The Petrochemicals Diversification Program was created to encourage companies to invest in the development of new Alberta petrochemical facilities by providing royalty credits up to $500 million. Under the program, royalty credits are only provided after construction is completed and a facility is operating.
While there is no plan currently to extend the Petrochemical Diversification Program, the government is looking to build on the interest this program has generated and explore other investment opportunities with petrochemicals that will benefit Albertans.
“This government is committed to diversifying our energy industry and creating good energy industry jobs. These investments will help create world-class petrochemical facilities, diversify our energy economy and create thousands of high-paying, skilled jobs in Alberta.”
“Our Jobs Plan is attracting investment to our province and building an economy for the future through initiatives like the Petrochemicals Diversification Program. These new facilities will help us diversify the type of energy we produce right here in Alberta and also create thousands of jobs to get us back on our feet. I was impressed by the many project proposals that were received and we are committed to encouraging continued growth in Alberta’s petrochemical sector.”
“We are honoured that the Government of Alberta selected our proposed project to be the recipient of $300 million in royalty credits under the Petrochemicals Diversification Program. This program shows leadership on behalf of the Province and will go a long way to ensuring Alberta's economy continues to diversify and grow by enabling projects such as ours to be more competitive in today's global market.”
“Alberta is a particularly attractive location for a world-scale propane dehydrogenation facility, given the ample supply of low-cost propane feedstock. A propane dehydrogenation facility and associated derivative facilities are an innovative way to provide a new market for Alberta propane, create jobs and help diversify our energy based economy.”
“The announcement today of successful projects marks a significant step forward in further diversifying our energy sector. The Resource Diversification Council is very supportive of the government’s decision to provide the required incentives to encourage this investment by industry to build world-scale petrochemical plants in Alberta. This is also an important step in generating greater value for our energy resources, building long term jobs and secondary industries, while securing a larger share of world markets for our refined energy products.”
“This is great news for Alberta's Industrial Heartland and great news for our entire province. These new petrochemical facilities will create stable jobs and new value chains that will benefit Albertans for decades to come. We commend the province on moving forward with this program and thank the companies involved for making Alberta's Industrial Heartland their location of choice.”