Alberta mega project in jeopardy?

07-Jun-06

The fate of US$10 billion proposed Alberta project, which was to proceed only if industry players decide in favour, seems to be in jeopardy. Questions have arisen regarding Alberta's current cost environment which has seen prices for labour and materials skyrocket and shortages of both, causing companies to re-think their plans. The project may not be able to proceed due to a lack of workers, equipment and material, as it is not possible to create an economically unviable industry. The proposed facility, which would produce up to 450,000 bpd of gasoline, kerosene and mostly diesel, would combine a bitumen upgrader, refinery, petrochemical production and electricity generation to maximize the value added to hydrocarbons in Alberta. A shortage of ethane is probably the largest single challenge facing Alberta's $10-billion petrochemical industry. Alberta will hold a third stage of discussions and analysis around finding ways to keep more ethane, a critical petrochemical feedstock that is derived from natural gas, in Alberta.