One of two proposed polypropylene plants for Alberta has received corporate approval to proceed.
Inter Pipeline Ltd. said Dec. 18 that its board of directors authorized construction of a propane dehydrogenation and PP resin complex in Strathcona County, near Inter Pipeline's Redwater olefinic fractionator.
The project, with the new name of Heartland Petrochemical Complex, is due for completion in late 2021. Estimated cost is C$3.5 billion (US$2.73 billion). Inter Pipeline said it has already spent C$400 million on engineering, procurement and early civil works. Fluor Corp. was awarded a detailed engineering contract for the propylene project with Linde Engineering handling front-end engineering.
The Calgary, Alberta, company predicts the project will generate about C$450 million (US$351 million) to C$500 million (US$390 million) of long-term annual average earnings before interest, taxes, depreciation and amortization.
“Driven by attractive feedstock and utility costs, the Heartland Complex is expected to be one of the lowest-cost polypropylene producers in North America,” said Inter Pipeline President and CEO Christian Bayle in a news release. Pembina calculates it will be able to produce 1.15 billion pounds of PP resin per year.
“Moving ahead with this world-class facility shows our petrochemicals diversification program is working to attract new investment,” said Alberta Energy Minister Margaret McCuaig-Boyd in a news release.
A year ago, Alberta's government announced hefty royalty credits for companies upgrading propylene into PP resin. Inter Pipeline will get C$200 million (US$156 million) in provincial royalty credits for the propylene portion of the project.
The other proposed Alberta propylene-to-PP project is led by Pembina Pipeline Corp. That project could be completed in 2021, pending a green light from Pembina's board of directors and various approvals. Pembina is partnering with Kuwait Petroleum Corp. in the PP resin portion of the plan. Total cost of the project was pegged last year between C$3.8 billion (US$2.96 billion) and C$4.2 billion (US$3.28 billion). The Pembina project also qualifies for provincial royalty credits.
Inter Pipeline's plans grew from its acquisition in summer 2016 of a natural gas liquids business formerly owned by Williams Cos. of Tulsa, Okla.