Canada/Kuwait JV Moves Closer to Building PP Unit

A Canadian/Kuwaiti joint venture is one step closer to building a major new polypropylene resin plant in Alberta.

Canada Kuwait Petrochemical Corp. is the name of the 50-50 JV between Pembina Pipeline Corp. of Calgary and Petrochemical Industries Co. (PIC) of Kuwait. The JV will use locally sourced natural gas liquids as feedstocks for a plant that will produce PP resin and propylene monomer in Sturgeon County, officials said in a May 15 news release.

The unit would have annual capacity of 1.2 billion pounds of PP resin production. PIC previously attempted to purchase the petrochemical assets of Dow Chemical Co. before that deal fell apart in 2009. PIC has been operating in Alberta since 2004 through various investments. including those in the petrochemical industry.

Front end engineering design work for the project now will begin. In the release, Pembina senior vice president Stuart Taylor cited encouraging results from a recently completed feasibility study and the previously announced award of $300 million in royalty credits from Alberta's Petrochemicals Diversification Program as reasons behind the project moving ahead.

"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," he added.

"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," PIC deputy CEO Hosnia Hashim said.

"This joint venture between PIC and Pembina will be positioned to flourish in a competitive market with access to secure and advantaged feedstock," she added.

Alberta Energy Minister Margaret McCuaig-Boyd said that the Alberta government "is committed to creating good jobs in the industry through investments in world class petrochemical facilities like this one."

Design work is ecpected to be done by late 2018. A final investment decision from each partner will follow at that time, officials said. The preliminary capital cost of the project is estimated at C$4 billion.