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CALGARY – Inter Pipeline Ltd. on Friday announced plans for another petrochemical project in Alberta that if built would raise the total value of proposed petrochemical facilities in the province to $12.6 billion.
Alberta Premier Rachel Notley announced the province would provide $70 million in royalty credits to Inter Pipeline for the new $600-million petrochemical project near Edmonton that would use a derivative of propane to make acrylic acid, which is used in paints and absorbent materials such as diapers.
Notley touted the project, and other recent petrochemical project announcements, as a way to reduce the need for new pipelines and boost the value of the province’s natural resources.
“Pipeline delays and our inability to get our oil products to new markets continues to cost our province and our country millions and millions of dollars each and every day,” she said. “We refuse to accept the situation.”
Through a “petrochemical diversification program,” Notley has attempted to encourage the construction of facilities that process Alberta’s abundant natural gas supplies into products such as plastic pellets.
At the same time, she has attempted to use similar incentives to encourage companies to invest in new refineries to process oil into products like gasoline, diesel and jet fuel amid a lack of new export pipelines.
So far, the petrochemical program has resulted in four projects, worth a cumulative total of $12.6 billion, being announced. Two of those projects, propane-to-plastics facilities by Inter Pipeline and Pembina Pipeline Corp., have broken ground. Another project, a methane-processing facility by Nauticol Energy Ltd. was announced in October.
The province is still looking for a new refinery project, though it is negotiating with companies on proposals to build heavy oil upgrading facilities.
“We all know the issues that we have about moving our unprocessed natural resources out of the province,” said David Chappell, Inter Pipeline senior vice-president, petrochemical development.
Inter Pipeline reached a final investment decision on its under-construction $3.5-billion propane-to-plastics facility in late 2017. The new acrylic acid facility would be located near the site of that project, and construction will begin after the first is complete.
“Pipelines are part of the solution to the woes of Alberta but they’re not the only solution. We need to get more value out of the product that we’re producing here, not just shipping more product out of the province,” Chappell said.
The province is still negotiating with companies seeking to build facilities that would process ethane into materials such as ethylene, and companies like Pembina have expressed interest.
Notley said the government would be making more announcements on future projects under the same program.
“We’re only about a third of the way through it,” she said.
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