02 October 2006 15:19 [Source: ICIS news]
TORONTO (ICIS news)--Canada's chemicals industry on Monday applauded the Alberta government's proposed policy to change its ethane royalties to boost extraction.
“This [policy] can lead to the expansion of existing chemical plants in Alberta, but I don’t think there will be enough [ethane] for greenfield investments," Dave Podruzny, vice president with Ottawa-based Canadian Chemical Producers Association told ICIS news.
Podruzny added that any additional ethane volumes would depend on the extent to which ethane extractors and petrochemical firms choose to exploit the policy once it is implemented next year.
Alberta’s provincial government announced last Friday a plan to grant consumption credits to petrochemicals makers for incremental ethane use. The credits are aimed at increasing ethane extraction in Alberta, thus boosting feedstock supplies to the province’s petrochemicals makers.
Under the proposed “Incremental Ethane Extraction Policy,” credits will only apply to ethane consumed by petrochemicals facilities above their current usage. Specific details will be unveiled in January 2007.
Podruzny said the Alberta ethane supplies are tight. “I understand that many ethane extraction facilities in Alberta are currently not running at full capacity,” he said.
He said the main users of ethane in Alberta are Nova and Dow, who use the ethane to make ethylene.
Separately, Provident Energy Trust, a Calgary, Alberta-based energy and ethane supplier, said in a statement that the proposed policy will provide incentives for further ethane processing in Alberta.
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