Two proposed world-scale polypropylene projects in Canada got a bit more momentum from incentives offered by the provincial government.
Alberta said Dec. 5 that it will give up to C$500 million (US$380 million) in royalty credits to two companies planning to upgrade propane to propylene for subsequent use to make PP resin. The province said in February it wanted to stimulate new petrochemical investments through royalty credits.
Pembina Pipeline Corp. proposes building a propane-to-propylene facility in Redwater, Alberta, with a polypropylene production plant next door. The two operations — worth between C$3.8 billion (US$2.9 billion) to C$4.2 billion (US$3.2 billion) — could be on stream in 2021, pending approvals and a final board decision. Pembina is partnering with Kuwait Petroleum Corp. in the PP resin project.
Separately, Inter Pipeline Ltd. proposes a propane-to-propylene operation in Fort Saskatchewan, Alberta, which qualifies for up to C$200 million (US$152 million) in royalty credits. Inter Pipeline is also pondering construction of a PP plant that would come on stream in 2021. Inter Pipeline inherited the propylene project in August when it bought a natural gas liquids business in the province run by Williams Cos. Williams had planned to build a propylene plant and sell the propylene to an affiliate of Goradia Capital to make PP resin adjacent to the olefin plant. Williams is based in Tulsa, Okla., and Goradia is in Houston.
Each proposed project would consume some 22,000 barrels a day of propane.
Alberta's government is offering the incentives to inject new life into the province's oil and gas sector hurt by low global oil prices. Alberta is not offering any more incentives for petrochemical projects.
The PP projects in the western Canada province are competing with similar plans in the United States that are spurred by a surge in PP feedstock availability from shale petroleum development.