Propane processing facilities result of successful bids under the Petrochemical Diversification Program
Alberta’s Industrial Heartland – Two new propane processing facilities are one step closer to reality thanks to today’s announcement by the Government of Alberta. Major investments proposed by Inter Pipeline Ltd and Pembina Pipeline Corporation have been approved to receive royalty credits as part of the Alberta Government’s Petrochemicals Diversification Program. These proposed facilities will add value to Alberta’s propane resources, creating growth and diversity in Alberta’s Industrial Heartland and Alberta’s energy sector.
“Petrochemical companies operate in an increasingly competitive, global market. Programs like the Petrochemical Diversification Program help position Alberta and our region as a competitive location for investment,” explains Ed Gibbons, Chair of Alberta’s Industrial Heartland Association (AIHA). “We commend the Government of Alberta for their support of value added processing and we congratulate Inter Pipeline and the joint venture of Pembina and Petrochemical Industries Company on their successful bids to the program. We welcome these innovative facilities to our region and Alberta.”
The proposed propane dehydrogenation (PDH) projects are the first of their kind in Canada, and take advantage of the Heartland’s ample supply of cost advantaged propane feedstock. Traditionally propane is used as a fuel product or shipped out of Alberta for processing elsewhere. The new facilities will convert propane into a higher value energy product. It is then used as the building block for numerous consumer products that include plastics, acrylic fibers, paints and resins which are steadily increasing in global demand. Projects of this magnitude help build sustainability in our workforce and communities, which strengthens Alberta’s economy.
Alberta’s Industrial Heartland will see direct positive impacts from these new facilities, which are expected to reach a combined capital cost of approximately $6 billion. This will generate a total of 4000+ construction jobs, nearly 250 operational jobs, increases to local spending, and the generation of tax revenues for local municipalities.
On a provincial scale, these projects will contribute to growth in Alberta’s Gross Domestic Product. Alberta communities will benefit from increased provincial tax revenue and a growing demand for engineering, fabrication, trades, and other professional jobs.
“Alberta is a particularly attractive location for a world-scale PDH facility given the ample supply of low-cost propane feedstock,” says Inter Pipeline’s President and CEO Christian Bayle. “A PDH facility and associated derivative facilities are an innovative way to provide new markets for Alberta propane, create jobs and help diversify our energy based economy.”
“Alberta’s Industrial Heartland has a number of significant advantages for our proposed facility, including the ability to utilize existing infrastructure such as rail, close proximity to inlet pipeline connections, high-load corridor road access, favourable site access and location adjacent to our existing Redwater facility, as well as a local skilled workforce,” says Mick Dilger, President & CEO, Pembina Pipeline Corporation. “The expansion work at our Redwater facility and our ongoing operations in the area have demonstrated the opportunities in the Heartland and the ability to take a coordinated approach to development.”
AIHA is eager to see both projects move forward into the construction phase. These projects will capitalize on market conditions, feedstock supplies, access to skilled labour, and government support for value added processing here at home. The Association looks forward to working cooperatively with the Government of Alberta’s Energy Diversification Advisory Committee to evaluate future program opportunities that will continue to promote value added investment and growth in the province’s energy sector.
For more information on the Petrochemicals Diversification Program, visit www.energy.alberta.ca. For more information and regular updates on Alberta’s Industrial Heartland Association, visit www.industrialheartland.com or follow @ABHeartland on Twitter.
Alberta’s Industrial Heartland is Canada’s largest hydrocarbon processing region. Alberta’s Industrial Heartland Association is dedicated to coordinating, advocating, and promoting long-term sustainable development of the region. The municipal partnership includes Lamont County, Strathcona County, Sturgeon County, and the Cities of Edmonton and Fort Saskatchewan.