TORONTO (ICIS)--Canada Kuwait Petrochemical Corp’s (CKPC) propane dehydrogenation/polypropylene (PDH/PP) project in Canada’s oil and gas-rich Alberta province remains on hold, subject to further evaluation.
The conditions under which work on the project may be restarted continue to be evaluated “within the context of our customers' future plans and the ongoing coronavirus pandemic and resulting global economic outlook”, project partner Pembina Pipeline said in filing on Thursday.
CKPC is a joint venture between Canadian midstream energy firm Pembina Pipeline and Kuwait’s Petrochemical Industries Company (PIC).
In January, CKPC had indicated a project startup of H2 2023, but in March the project was deferred, with officials citing the coronavirus pandemic and the decline in global energy prices.
The PDH/PP complex, to be built adjacent to Pembina's Redwater fractionation complex northeast of Edmonton, Alberta, involves converting 23,000 bbl/day of low-cost Alberta-sourced propane into PP.
Prior to CKPC's decision to defer further investment in the PDH/PP project it closed a syndicated senior secured $1.7bn amortising term facility and a $150m revolving credit facility, both of which have been guaranteed by the owners of CKPC through the completion of construction.
The final maturity date of both the term facility and revolving credit facility is 27 February 2027, Pembina said in its filing.
Pembina has estimated its proportionate share of the project’s capital cost at Canadian dollar (C$) $2.7bn ($2.1bn). As of 30 September, the carrying value of Pembina’s investment in CKPC was C$326m.
In related news, Alberta's new “Alberta Petrochemicals Incentive Program” (APIP) came into effect on 1 November, and an unnamed private Saudi Arabian company is reportedly considering a petrochemicals investment in the province.
($1 = C$1.31)
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