A Canadian and Kuwaiti joint venture has given final approval to building a major new polypropylene resin plant in Alberta.
Canada Kuwait Petrochemical Corp., a 50-50 JV between Pembina Pipeline Corp. of Calgary and Petrochemical Industries Co. (PIC) of Kuwait, will spend $4.5 billion on the project, which is expected to open in mid-2023. The site also will make propylene monomer through propane dehydrogenation (PDH).
The JV will use locally sourced natural gas liquids as feedstocks for a plant in Sturgeon County. The unit would have annual capacity of 1.2 billion pounds of PP resin production.
Building the PP/PDH unit "is the largest step taken to date by Pembina in executing its strategy to secure global market prices for customers' hydrocarbons produced in western Canada, and provides another exciting platform for future growth," Pembina President and CEO Mick Dilger said in a Feb. 4 news release.
The facility "is ideally aligned with PIC's continued pursuit of sustainable and globally-diversified growth," PIC CEO Mohammed Abdullatif Al-Farhoud added.
PP resin made at the new plant can be cost-effectively transported, using existing third-party infrastructure, throughout North America and to global markets, officials said in the release.
"The market for PP continues to see favorable long-term fundamentals with global PP demand growth outpacing global economic growth," officials said. PIC, with extensive global marketing experience and worldwide sales presence, "will be fundamental to ensuring CKPC becomes a PP supplier of choice for customers," they added.
The PP/PDH facility will be located adjacent to Pembina's Redwater Fractionation complex and will consume approximately 23,000 barrels per day of local propane from RFS and other regional fractionation facilities. Pembina will manage long-term propane supply and provide Alberta-specific operating and project execution experience, feedstock connectivity and strong producer relationships, officials said.
CKPC also has been awarded $300 million of royalty credits from the Alberta government. Pembina owns an integrated system of pipelines that transport various hydrocarbon liquids and natural gas products produced primarily in western Canada.
The CKPC project is the second major PP resin unit approved for Alberta. In December 2017, Inter Pipeline Ltd. authorized construction of a propane dehydrogenation and PP resin complex in Strathcona County, near the firm's Redwater olefinic fractionator.
That project would cost almost $3 billion to build and is set top open in late 2021. It would have annual capacity of 1.15 billion pounds of PP resin.