Canada PP/PDH projects may get government credits

Source: ICIS News

2016/12/05

Station piping at Pembina’s Valleyview Terminal Facility south of Valleyview, Alberta (Pembina)
Two propane dehydrogenation units and a polypropylene plant could get up to Canadian dollar (C$)500m in royalty credits from the province of Alberta. Shown above, station piping at Pembina’s Valleyview Terminal Facility in Alberta. (Pembina)

HOUSTON (ICIS)--Two propane dehydrogenation (PDH) units and a polypropylene (PP) plant could get up to Canadian dollar (C$)500m ($376m) in royalty credits from the province of Alberta, the government said on Monday.

One of the PDH units – as well as the PP plant – would be built in Sturgeon county by a joint venture made up of Pembina Pipeline and Kuwait's Petrochemical Industries Co (PIC). The project could cost C$3.8bn-4.2bn, the province said.

The PDH plant will consume about 22,000 bbl/day of propane, the province said.

Alberta did not specify the capacity of the PP plant. However, earlier this year, the joint venture said the plant could produce 800,000 tonnes/year of PP.

This project could receive up to C$300m in royalty credits, the province said.

Inter Pipeline is building the other PDH unit, the province said. The company could receive up to C$200m in royalty credits to build the C$1.85m PDH plant in Strathcona county.

The plant will consume about 22,000 bbl/day and produce about 525,000 tonnes/year of propylene (PGP). Construction should start in 2017 and operations in 2021.

In addition to the PDH plant, Inter Pipeline is also assessing the viability of a $1.3bn PP plant, the company said. If Inter Pipeline decides to develop the PP plant, it could also start operations in 2021.

The Inter Pipeline project has had a complicated history. It was originally proposed by US midstream company's Williams.

Under the earlier proposal, the Canadian business unit of Williams would build the PDH plant. It would then send the propylene to a PP plant to be built by Goradia Capital.

Williams later sold the Canadian business to Inter Pipeline.  

An affiliate of Goradia then sued Williams over the PP project. The lawsuit was filed in Texas state court, District Court of Harris County. The case number is 2016-53287.

($1 = C$1.33)