Inter Pipeline ramping up construction on Canada PDH/PP complex

16 February 2018 18:13 Source:ICIS News

TORONTO (ICIS)--Inter Pipeline has begun construction work on its propane dehydrogenation (PDH) and polypropylene (PP) complex in Alberta province, with work expected to be “significantly” ramped up in the first half of this year, the top executives of the Canadian midstream energy, pipeline and natural gas liquids (NGL) company said on Friday.

The executives, speaking during a webcast conference call, also confirmed the project’s targeted completion timeline for end 2021.

In December, Inter Pipeline sanctioned construction of what will be Canada’s first integrated PDH/PP complex.

The project, referred to as the “Heartland Petrochemical Complex”, will be built at an estimated cost of Canadian dollar (C$) 3.5bn ($2.8bn) at Strathcona County, Alberta, near Inter Pipeline’s existing “Redwater Olefinic Fractionator”.

As of 31 December, about C$400m has been invested in the project.

In 2018, about C$650m is expected to be invested in the complex on a number of activities including finalising engineering, the continued procurement of equipment, facility module fabrication, and site construction, the executives said.

The company is conducting a two-phase contracting process to underpin the Heartland investment, they said.

Phase 1, which was completed in 2017, resulted in Inter Pipeline securing certain take-or-pay contracts with an average term of nine years.

During Phase 2, expected to occur over the next four years, Inter Pipeline expects to secure between 70% and 85% of total petrochemical processing capacity under take-or-pay contracts.

Since sanctioning the project last December, Inter Pipeline has seen a clear uptick in interest from counter-parties, who were waiting for “this project to be real”, an executive added.

Inter Pipeline ranks as one of Canada’s largest NGL firms, with three major straddle plants, two offgas plants, an offgas liquids pipeline and a fractionator, all located in Alberta.

Canada has a second PDH/PP complex in the works, also in Alberta, by CKPC, a 50:50 joint venture between Canada’s Pembina Pipeline and Kuwait’s Petrochemical Industries Co (PIC). The joint venture has yet to announce a final investment decision.

($1 = C$1.25)


By Stefan Baumgarten