​The $2 billion details of Alberta’s 'courageous' new petchem, NGL, partial upgrading funding

The Alberta government on Monday provided more details into its recent announcement to fund new development of petrochemical projects and feedstock infrastructure.

Minister of Energy Margaret McCuaig-Boyd announced a total of $2 billion in funding including $500 million in royalty credits for a second phase of the Petrochemicals Diversification Program and $500 million in loan guarantees and grants to create a Petrochemical Feedstock Infrastructure Program.

This builds on the $1 billion over eight years that the province announced in late February to support commercialization of bitumen partial upgrading technologies.

It’s all designed to increase the value derived from Alberta’s resources within the province’s borders, as well as free up pipeline export space, in the case of bitumen partial upgrading.

“Adding more value to our raw products at home means more jobs for Albertans and getting top dollar for our resources,” McCuaig-Boyd said in a statement.

The second round of the Petrochemicals Diversification Program would expand to accommodate proposals that natural gas products and liquids include using ethane, in addition to propane and methane.

The two projects that were awarded a combined $500 million in the first round of the program in late 2016 focus on petrochemicals from propane.

“Expanding to include ethane uses would encourage applications for building a new ethane cracker, a large-scale complex petrochemical facility that converts ethane to the necessary components for plastics, detergents, lubricants and other household products,” the province said.

The Petrochemicals Feedstock Infrastructure Program would focus on helping secure a larger supply of the raw components needed in petrochemical manufacturing.

“The investments would encourage industry to move forward on the facilities and infrastructure needed to capture more natural gas liquids required for value-added development. This includes components such as ethane, methane and butane, with ethane recovery being the primary focus,” the government said.

“These developments could include new natural gas processing facilities, smaller projects built closer to wellheads or straddle plants, facilities that are built along major natural gas pipelines that can extract certain components during transportation.

“These two programs complement each other because the greater and more stable the supply of these raw components, the greater the potential of attracting and supporting more value-added developments in Alberta.”

Chemistry Industry Association of Canada CEO Bob Masterson called the province’s plan an “incredibly courageous move.”

“We believe that governments at all levels in Canada need to work with industry to compete for new chemistry sector investments,” he said in the statement released by the province.

“To do nothing means that some other jurisdictions will use our energy resources as feedstock to create value. Taking a balanced approach to share risk and secure new investments here in Alberta will create wealth and opportunity for Albertans. It’s the right thing to do.”

Image: Energy Minister Marg McCuaig-Boyd announces program details on March 12, 2018 alongside (l-r) Chemistry Industry Association of Canada CEO Bob Masterson, Mayor of Strathcona County Rod Frank, Inter Pipeline senior vice-president David Chappell and Strathcona-Sherwood Park MLA Estefania Cortes-Vargas. Credit: Province of Alberta/Flickr

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