Canadian/Kuwaiti jv for propylene/PP project in Canada

Calgary-based Pembina Pipeline Corporation along with Petrochemical Industries Company (PIC) of Kuwait are to move ahead with the previously announced proposed integrated propylene and polypropylene production facility in Sturgeon County, Alberta. Pembina and PIC have executed 50/50 joint venture agreements and have formed a new entity, Canada Kuwait Petrochemical Corporation (CKPC).

The proposed PDH/PP facility is expected to consume 22,000 barrels/day of Alberta-produced propane, which is expected to be sourced from Pembina’s Redwater Fractionation Complex, as well as other regional facilities.

It is anticipated to produce around 544,000 tonnes/year of PP for the North American and global markets. Subject to required approvals and a positive FID, the jv expects to construct the PDH/PP Facility in close proximity to Pembina’s RFS complex in Sturgeon County, part of Alberta’s Industrial Heartland. The preliminary capital cost estimate of the project is C$3.8 to C$4.2 billion (gross).

“The encouraging results of the recently completed feasibility study, the previously announced award of US$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 decision to proceed represent major milestones for Pembina and PIC. Deliverables of the front end engineering design (FEED) work 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.

FEED activities are expected to be completed by late 2018, followed by a final investment decision from each partner.