Alberta Premier Rachel Notley’s work to encourage new petrochemical investment in the province reached a major milestone on Monday.
Pembina Pipeline Corporation announced it will proceed with a $4.5-billion new integrated propane dehydrogenation plant and polypropylene facility in Sturgeon County.
In late 2016 Pembina and its joint venture partner were one of two project owners to be awarded petrochemical funding support from the government.
The other project proponent, Inter Pipeline Ltd., commenced construction on its $3.5-billion Heartland Petrochemical Complex in late 2017.
Here are 13 facts about the new project to receive corporate approval.
- The project is a joint venture with Petrochemical Industries Company K.S.C. of Kuwait (PIC) that was announced in April 2016 when the companies commenced a feasibility study.
- Two months later, Pembina acquired over 2,200 acres of developable land adjacent to its Redwater complex to serve as home for the project
- The facility was awarded $300 million in royalty credits by the Government of Alberta through its Petrochemicals Diversification Program in December 2016.
- In May 2017 Pembina and PIC formed Canada Kuwait Petrochemical Corporation, the 50/50 joint venture entity that will own the project. They also announced the start of front-end engineering design, which was later awarded to Jacobs Engineering Group.
- Two major technology partners on the project are Honeywell UOP (Oleflex process technology) and W.R. Grace (UNIPOL PP process technology).
- The complex will process about 23,000 bbls/d of Alberta propane into polypropylene, which is a much higher-value plastic material used around the world to make products such as food packaging, auto parts and electronics.
- Pembina originally expected the partners to make the final investment decision on the project in mid-2017.
- This was most recently delayed to early 2019 after Pembina announced in mid-December it had not yet reached the contractual threshold required to take FID.
- At the peak of construction, more than 3,000 workers will be on site, with the project expected to create over 200 full-time operations and head office jobs upon completion.
- Construction is expected to start in 2019, with the complex fully operational by mid-2023. The project will receive royalty credits after the facility has been constructed and is in operation.
- The facility is expected to generate annual run-rate adjusted EBITDA net to Pembina of $275 to $350 million.
- The government announced a second round of support for petrochemical upgrading in 2018, with total support now reaching $2.1 billion to unlock about $20 billion in private-sector investment.
- This would help create as many as 15,500 jobs during construction of multiple petrochemical facilities across the province, the government says.