Alberta launching petrochemical grants

Petrotahlil - Alberta's government is launching the Alberta Petrochemicals Incentive Program, a 10-year program that will issue grants rather than royalty credits for new petrochemical projects in the province.

The grants of an unspecified amount would run alongside the government's existing royalty-based Petrochemicals Diversification Program, said Dale Nally, Alberta's associate minister of natural gas and electricity. The new grants will begin in the fourth quarter with a goal of attracting C$30bn ($22bn) in investment by 2030.

The grants will be issued to companies after eligible projects are operational, according to Nally. The program will run year-round without any specific deadline. Grant amounts, terms and application process are yet to be finalized.

The ministry estimated Alberta's ethane production could supply at least two new ethylene plants in the region.

A slowdown in oil and gas production in the region during the first quarter contributed to economic uncertainty in western Canada.

"This program is exactly what the industry needs and will attract a lot of investment," said David Chappell, senior vice president of InterPipeline and board chair of Alberta's Resource Diversification Council.

InterPipeline's 525,000 t/yr Heartland propane dehydrogenation (PDH) unit and associated derivatives units in Strathcona County, which will consume approximately 22,000 b/d of propane from its Redwater fractionator, is already under construction and is slated for operation in early 2022. InterPipeline is still pursuing a strategic partner for the project.

Pembina announced a final investment decision on its own 550,000 t/yr PDH unit and polypropylene facility as part of an investment with Kuwait's Petrochemical Industries Company in February 2019, but has since deferred that investment.

Follow us on twitter @petrotahlil

Argus

END