Alberta Government reveals new petrochemicals diversification program

04-Feb-16

The Government of Alberta in Canada has revealed a new petrochemicals diversification programme, under which a sum of C$500 mln (US$357 mln) in royalty credits will be provided over a period of ten-years to build petrochemical plants across the province. The petrochemical projects will be selected through a competitive application process, and upon completion of the approved projects as well as the start of feedstock consumption, the government will provide the credits. However, the selected petrochemical plants will not be able to take advantage of the royalty credits directly, since they do not pay royalties, but they can trade or sell the credits to an oil or natural gas producer. "This innovative programme builds on the strengths of our energy industry and will attract new investment to our province." The producers would be able to use these credits to minimise their royalty payments to the government. Alberta Economic Development and Trade Minister Deron Bilous said: "Today's commitment to diversification in the petrochemical sector is part of the government's economic action plan, a plan to create jobs, diversify our economy and add more value to our resources. "This innovative programme builds on the strengths of our energy industry and will attract new investment to our province." The new plants have the potential to create around 3,000 jobs during construction and once operational, they will create a further 1,000 jobs, as well as bringing in C$3 bln (US$2.1 bln) to C$5 bln (US$3.5 mln) worth of investment. According to the representatives of Alberta Government, the programme is formulated on the recommendations of the royalty review panel that suggests forming a value-added natural gas strategy to further improve and produce higher-value energy products in the province. Alberta city of Edmonton Councillor chair Ed Gibbons said: "This programme diversifies our economy through the attraction of new investment ?and the creation of stable, sustainable jobs softening the current economic cycle we are experiencing." Currently, only one facility in Alberta reportedly converts methane to methanol, while propane gas is mainly shipped out of province to be processed elsewhere. Once the new petrochemical plants are operational, Alberta will be able to transform propane into polypropylene, which is used to manufacture all kinds of consumer goods.