Canada: Petrochemicals Canada and Kuwait Form JV for Propylene and Polypropylene Production

Editor: Alexander Stark

Pembina and Petrochemical Industries Company of Kuwait have announced that they have made decisive progress on the realization of an integrated propylene and polypropylene production facility in Sturgeon County, Alberta.

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Calgary-based Pembina Pipeline Corporation is a transportation and midstream service provider
Calgary-based Pembina Pipeline Corporation is a transportation and midstream service provider
(Source: Pembina)

Calgary/Canada — The companies have executed 50/50 joint venture agreements that include binding commercial terms in support of the project and have formed a new entity, Canada Kuwait Petrochemical Corporation (CKPC). The joint venture will proceed with activities for front end engineering design for the Project. Deliverables of Feed include a refined capital cost estimate, a project execution plan, regulatory applications, an updated construction schedule and projected in-service date, among numerous other items. The anticipated cost of Feed is expected to represent approximately 2.0 to 2.5 % of the project's current cost estimate. Feed activities are expected to be completed by late 2018, followed by a final investment decision from each partner.

"The encouraging results of the recently completed feasibility study, the previously announced award of $ 300 million in royalty credits from the Alberta Government's Petrochemicals Diversification Program, and a joint venture with our world class partner, PIC, gives Pembina the confidence to further advance the Project," said Stuart Taylor, Pembina's Senior Vice President, NGL & Natural Gas Facilities. "This project represents a material extension of our natural gas liquids value chain strategy and creates a significant incremental local market for western Canadian hydrocarbons."

The proposed PDH/PP Facility is expected to consume 22,000 barrels per day of Alberta-produced propane, which is expected to be sourced from Pembina's Redwater Fractionation Complex, as well as other regional facilities. The project is anticipated to produce in excess of 1.2 billion pounds (544 Million kg) per year of polypropylene which would be transported to North American and global markets. Subject to required approvals and a positive FID, the joint venture expects to construct the PDH/PP Facility in close proximity to RFS in Sturgeon County, part of Alberta's Industrial Heartland. The preliminary capital cost estimate of the Project is $ 3.8 to $ 4.2 billion (gross).

"PIC is looking forward to progressing the development of this Project into Feed stage. Establishing a Joint Venture with Pembina and investing in a large-scale value-addition project will contribute to PIC's continued pursuit of sustainable and globally-diversified petrochemical growth," said Mrs. Hosnia Hashim, PIC's Deputy Chief Executive Officer, Olefins and Aromatics. "This Joint Venture between PIC and Pembina will be positioned to flourish in a competitive market with access to secure and advantaged feedstock. PIC welcomes the support of the local governments in this initiative and is looking forward to potentially expanding its asset base within Alberta."