Inter Pipeline says that it has sold the cogeneration plant that will support its Heartland Petrochemical Complex to Fengate Capital Management.
The $600 million capital cost of the Central Utility Block (CUB), which will provide the facility with electricity, steam and other key utilities, was not included in the previously reported $3.5 billion overall plant cost.
Inter Pipeline will recover from Fengate the $50 million it has spent on the CUB so far.
The transaction “has meaningfully reduced” Inter Pipeline’s overall capital cost for the Heartland Complex, CEO Christian Bayle said in a statement.
Fengate has also entered into long-term agreements to supply core utilities to Inter Pipeline's Heartland Petrochemical Complex in exchange for structured capital and operating recovery fee payments.
Construction of the Heartland Complex is in progress with completion scheduled for late 2021, Inter Pipeline said.
It will be Canada’s first integrated project to convert locally-sourced propane into polypropylene pellets for use in plastics and other products, and has up to $200 million in royalty credits committed from the Government of Alberta.