Alberta royalties move positive for chem growth

27 August 2008 18:19  [Source: ICIS news]

TORONTO (ICIS news)--A decision by Alberta’s provincial government to take bitumen as a royalty-in-kind instead of cash is a positive for the province’s chemicals sector, industry officials said on Wednesday.

 

The move, aimed at ensuring that more of the upgrading of Alberta’s heavy oil sands crude take place in the province, rather than at US refineries, would result in more opportunities to glean ethane-rich off-gases from upgrading processes and convert them to petrochemical feedstock, they said.

 

“We welcome this [royalty-in-kind] decision as an opportunity for more value-added production in Alberta,” Dorothy Golosinski, a Calgary-based spokeswoman for midstream gas processor Aux Sable told ICIS news.

 

Aux Sable is involved in a project that produces ethane feedstock from off-gases provided by a bitumen upgrader in Alberta.

 

Alberta’s petrochemicals producers are looking to the province's expanding oil sands and bitumen production as an important source of future feedstock to expand and build new chemical plants.

 

In a statement on its website the Alberta government invited interested parties to make submissions detailing their interest, and explaining how they would participate in using the government’s bitumen royalty-in-kind (BRIK) volumes.

 

“Submissions should reflect the province’s objective of maximising return from its royalty share of bitumen, and may contemplate: upgrading, refining, producing petrochemicals, managing commercial processes, marketing higher value products, facilitating access to new markets, providing infrastructure, providing ancillary services or any other related activity,” it said.

 

The government’s bitumen-in-kind royalty decision comes on top of its ethane extraction policy to boost ethane availability in the province.

 

Alberta has often been criticised for not doing enough to ensure that more of its oil, gas and oil sands resources are used for value-added chemicals and petrochemicals production in Canada, instead of just being exported to the US.

 

To discuss issues facing the chemical industry go to ICIS connect


By: Stefan Baumgarten
+1 713 525 2653



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