Propane produced by Seven Generations Energy from its Montney drilling operations will soon be on its way to becoming plastic.
The company says it has reached a long-term agreement to supply propane to Inter Pipeline’s Heartland Petrochemical Complex, which is under construction near Edmonton.
Seven Generations says the deal is part of its strategy to find new markets for its products and realize higher returns.
“This sales agreement will enable 7G to diversify its propane sales and capture stronger realized prices within the Alberta petrochemical value chain,” the company said in its annual results this week.
Seven Generations produced a record 197,300 boe/d in the fourth quarter of 2017, of which 58 percent was natural gas liquids including propane.
Inter Pipeline’s $3.5 billion propane dehydrogenation and polypropylene facility, which received $200 million in funding through the first round of Alberta’s Petrochemicals Diversification Program, is expected to commence production in late 2021.
Seven Generations reported net income of $562.5 million for 2017, up from a net loss of $26.2 million in 2016.