The federal government has given a $4.5-billion plastics plant in Sturgeon County a $49-million boost.
Natural Resources Minister Amarjeet Sohi announced April 26 that the federal government had given the Canada Kuwait Petrochemical Corporation (CKPC) $49 million to build the polypropylene complex in Sturgeon County.
CKPC is a joint venture between Pipeline Corp. and Kuwait's Petrochemical Industries Company.
“Our government is working with the hard-working men and women in Alberta’s oil and gas sector to create new jobs, opportunities, and markets for Canada’s resources,” Sohi said in a press release.
“That’s why we’re proud to support CKPC’s project that will take low-priced Canadian propane and produce high-quality polypropylene right here in Alberta and secure thousands of jobs in the process.”
The plant is designed to convert 23,000 barrels of propane a day from local sources (mainly the adjacent Pembina gas plant) and transform it into about 550,000 tonnes of polypropylene pellets each year for shipment across North America by rail. Polypropylene is also known as No. 5 plastic and is used products such as margarine tubs.
The federal government estimates that the plant will create 200 permanent jobs and about 1,910 construction ones.
This grant (which has been in the works for some time) was a big part of the reason why CKPC green-lit this plant earlier this year, said Kevin Jagger, vice-president of petroleum for Pembina.
“To build in Alberta and to build in Canada is expensive,” he said – about 30 per cent more expensive than along the Gulf Coast – and this capital contribution made this project more viable.
Canada is competing for foreign investment against regions such as the Gulf Coast that are pouring on the incentives, said Mark Plamondon of the Alberta’s Industrial Heartland Association. Federal support like this goes a long way in overseas boardrooms when it comes to making investment decisions.
Sturgeon County Mayor Alanna Hnatiw said it was great to see the federal government recognize the importance of this project.
“Propane is one of our richest natural resources, and we’ve been shipping it out as a raw commodity,” she said.
Plants like this one and the Inter Pipeline project now under construction across the North Saskatchewan River would add value to our propane and could draw other spinoff businesses, Hnatiw said. This plant alone would likely add about $17 million a year to the county’s tax coffers.
Jagger said this plant would more or less double the demand for propane in Alberta, and with U.S. demand in the pits, we’ve got propane to spare.
“That area is the epicenter of Alberta propane gathering,” he said.
“We’re putting the demand right on top of the supply.”
Polypropylene pellets (which are the size of eraser heads) also take up about half as much space as propane, which will free up more space on trains for other products, Jagger said.
Canada will go from producing zero tonnes of polypropylene a year to about a million once this plant and the Inter Pipeline one start up, Plamondon said. That will give this region an edge when it comes to drawing manufacturers that use polypropylene in their products.
The federal government says making polypropylene locally instead of shipping it out as propane and having it return as finished goods could prevent some 180,000 tonnes of greenhouse gas emissions a year (about a quarter to a fifth of St. Albert’s carbon footprint, based on this city's most recent state of the environment report).
Jagger said that residents should expect to see grading work at the plant’s construction site in southeast Sturgeon County over the next few weeks, with construction kicking into high gear by late summer.
Visit bit.ly/2IL7oOM for a summary of the project.
