​Alberta planning second round of Petrochemicals Diversification Program

Rendering of Inter Pipeline's Heartland Petrochemical Complex, which is under construction. Image: Inter Pipeline

The Government of Alberta has introduced legislation to launch a second round of the Petrochemicals Diversification Program (PDP) as well as establish a Feedstock Infrastructure Initiative to help deliver the natural gas components needed to support these projects.

Two petrochemical projects were awarded a total of $500 million in government funding through the first round on the PDP in 2016.

Construction is underway on Inter Pipeline's $3.5-billion Heartland Petrochemical Complex, while front end engineering and design is underway on Pembina Pipeline's proposed integrated propylene and polypropylene production facility, a joint venture with a subsidiary of Kuwait Petroleum Corporation which is valued at $3.8 billion to $4.2 billion.

Additionally, the Feedstock Infrastructure Program introduced this week "will help industry move forward on the facilities and infrastructure needed to capture more natural gas liquids required for value-added development," the province said.

This includes components such as ethane, methane and butane.

"Ethane and other components are separated or processed from natural gas in a variety of ways, often at a large-scale processing facility, but it can also occur in smaller facilities located closer to the production site.

"Straddle plants extract certain natural gas liquids, including ethane, from major natural gas transmission pipelines and then ship them to other processing or manufacturing plants.

"This program will encourage industry to develop more of the facilities needed to capture these important raw ingredients instead of relying on imports from the United States and elsewhere."