Alberta Boosts Support for Petchem Investments
Alberta’s NDP government November 20 increased its support for new petrochemical investments in the province – which is expected to increase natural gas demand – by adding C$600mn ($452mn) to an earlier C$500mn package of incentives.
Round 2 of the province’s petrochemicals diversification program, announced in March 2018, offered C$500mn in royalty credits for projects that would add value to ethane, propane and butane extracted from the province’s natural gas stream. Yesterday’s announcement added C$600mn to that program.
Funding for a companion program, the petrochemical feedstock infrastructure program, designed to attract investments that would provide the feedstock for petrochemical manufacturing facilities, has been doubled to C$1bn, bringing the province’s total support for petrochemical investments to C$2.1bn.
“We’re fighting for Albertans to make sure we get every dollar of value for the oil and gas resources that belong to them,” Alberta premier Rachel Notley said. “For decades, we’ve been settling for less while seeing new jobs and investment go south of the border. The time is now to think big, take action and finally upgrade more of our energy at home.”
The increased investment follows strong interest in the second tranche of the program that saw a total of 23 projects submit applications for both programs, representing C$60.2bn in potential investment in Alberta’s petrochemical sector. Projects approved under this stage are expected to create C$20.6bn in new investment, 15,500 construction jobs, 1,000 operating jobs and C$284mn/year in corporate taxes.
“Once again, interest has far exceeded expectations,” Alberta energy minister Marg McCuaig-Boyd said. “It sends a clear signal that companies from around the world want to invest in Alberta. We need to put our foot on the gas pedal, accelerate energy upgrading in our province and seize this opportunity to bring even more jobs and value to Albertans.”
The government will soon create a short list of proposed projects and begin discussions with successful proponents. New projects will be announced in the coming weeks.
The first phase of the petrochemicals diversification program, launched in 2016, awarded a total of C$500mn in royalty credits to a pair of projects: a C$3.5bn facility currently under construction near Edmonton that will convert propane into plastics and a C$3.8bn to C$4.2bn integrated propane dehydrogenation and polypropylene facility proposed by Pembina Pipeline and Canada Kuwait Petroleum Corporation. A final investment decision on that project is expected early next year.