06-Dec-16 Two new petrochemical projects for the Industrial Heartland region will qualify for up to $500 mln in royalty credits under Alberta's petrochemicals diversification program announced early in 2016. Both projects will convert propane extracted from natural gas into value-added plastic products. "These investments will help create world-class petrochemical facilities, diversify our energy economy and create thousands of high-paying, skilled jobs in Alberta," Energy Minister McCuaig-Boyd said in a news release.
The first project is a joint venture between Calgary-based Pembina Pipeline Corporation and Petrochemical Industries Company, based in Kuwait, to build a new facility in Sturgeon County. With construction costs estimated at between $3.8-$4.2 bln, the facility will process 22,000 bpd of propane into polypropylene, the plastic material used in manufacturing a wide variety of everyday products, from automobile parts to Canadian bank notes. Construction is expected to start in 2019, with the facility operating by 2021. It has been approved to receive up to $300 million in royalty credits under the diversification program.
The second project, by Calgary-based Inter Pipeline, has been approved for up to $200 million in royalty credits. Inter Pipeline plans to build a $1.85 bln facility in Strathcona County to process 22,000 bpd of propane into propylene, a feedstock for the production of polypropylene and other derivatives. Construction is expected to start in 2017, with the facility in production by 2021.
Under the program, royalty credits are only provided after construction is completed and a facility is operating.
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