April 12, 2016 Updated 4/12/2016
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Pembina Pipeline Corp. Construction at Pembin’s Redwater, Alberta, fractionation plant in Canada.
A company controlling most of the propane collected from natural gas in western Canada is studying whether to upgrade the hydrocarbon in a new polypropylene plant in Alberta.
Pembina Pipeline Corp. announced April 11 that it and Kuwait Petroleum Corp. are looking at a possible 1.76 billion pound-per-year PP plant that could come on stream by 2020. The partners expect to decide on the project by mid-2017.
The project is the second new PP plant proposed for Alberta this year. Williams Cos. of Tulsa, Okla., said in January that its Canadian subsidiary is willing to provide propylene from a new plant to a potential new PP operation in Alberta owned by Houston private equity Goradia Capital, which already has a stake in a PP plant in Saudi Arabia.
Alberta’s government is offering C$ 500 million (US$ 380 million) in incentives for new petrochemical plants to exploit the province’s petroleum resources. Although Alberta already has a large petrochemical industry, about 85 percent of the province’s propane is now shipped to other parts of Canada and the United States.
Pembina and KPC envision a possible operation that would dehydrogenate gas-derived propane to propylene and in turn make PP resin in Alberta. Pembina, a Canadian pipeline heavyweight, is building a third natural gas fractionation plant that will give it control of 60,000 barrels per day of propane, about 70 percent more than it would need for a PP plant.
