Pembina announces $4.5B petrochemical facility for Alberta

Facility near Edmonton is expected to be in service in mid-2023, subject to environmental and regulatory approvals

Calgary-based Pembina Pipeline Corp. announced on Monday that it’s proceeding with a $4.5-billion Alberta project with joint venture partner Petrochemical Industries Co. of Kuwait.

The partnership will construct a 550,000-tonne-per-year integrated propane dehydrogenation (PDH) plant and polypropylene (PP) upgrading facility near Edmonton.

The PDH/PP facility will be strategically located in Alberta’s Industrial Heartland, adjacent to Pembina’s Redwater fractionation complex and will consume approximately 23,000 barrels per day of local propane from RFS and other regional fractionation facilities. Ideally located in the Western Canadian Sedimentary Basin, the facility will have long-term access to an abundant supply of propane feedstock, with a structural cost advantage when compared to other North American facilities,” said Pembina in a news release.

“The PDH/PP facility has a nameplate capacity of 550,000 tonnes of PP per year, including impact and random copolymers. PP is a high-value polymer, which can be cost-effectively transported, using existing third-party infrastructure, throughout North America and to global markets. PP is fully recyclable and can be used in a wide range of finished products, including automobiles, medical devices, food packaging and home electronic appliances, among others. The market for PP continues to see favourable long-term fundamentals with global PP demand growth outpacing global economic growth.”

The company said the facility is expected to be in service in mid-2023, subject to environmental and regulatory approvals, and is expected to generate annual run-rate adjusted earnings of $275 million to $350 million net to Pembina.

Mick Dilger
Mick Dilger

“Sanctioning of the PDH/PP facility is the largest step taken to date by Pembina in executing its strategy to secure global market prices for customers’ hydrocarbons produced in Western Canada, and provides another exciting platform for future growth,” said Mick Dilger, Pembina’s president and CEO, in a statement.

“Today’s announcement is the culmination of many years of hard work with our partner to develop a project that is well positioned to capitalize on Alberta’s abundant supply of propane and undertake value-added processing that benefits all of Pembina’s stakeholders, the province of Alberta and indeed all of Canada.”

“The PDH/PP facility is ideally aligned with PIC’s continued pursuit of sustainable and globally-diversified growth,” said Mohammed Abdullatif Al-Farhoud, PIC’s CEO, in a statement. “Our investment in CKPC provides PIC an opportunity to build on our existing asset base in Alberta by developing large-scale petrochemical infrastructure with a highly strategic partner in a market with long-term feedstock security and a supportive local government.”

– Mario Toneguzzi for Calgary’s Business

pembina petrochemical facility

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