Canada Kuwait Petrochemical lets contract for Alberta complex

Canada Kuwait Petrochemical Corp. (CKPC), a joint venture of Pembina Pipeline Corp., Calgary, and Petrochemical Industries Co. KSC (PIC) of Kuwait, has let a contract to Heartland Canada Partners—a 50-50 partnership between Fluor Canada Ltd. and Kiewit Construction Services ULC—to provide engineering, procurement, and construction (EPC) for a major unit at CKPC’s proposed 550,000-tonne/year integrated propane dehydrogenation (PDH) and polypropylene (PP) complex in Sturgeon County, Alta. (OGJ Online, May 16, 2017).

HCP’s scope of work on the project will include delivery of EPC services for construction of the complex’s PDH unit, Pembina said.

While Pembina did not disclose a specific value of the lump-sum EPC contract, the operator did confirm that the contract secures about 60% of CKPC’s entire cost of the previously projected $4.5-billion PDH-PP complex.

With the EPC contract for the PDH unit providing 60% cost certainty for the project, Pembina also confirmed it has revised its proportionate share of the capital cost of the PDH-PP complex—including its 100% share of directly-owned supporting facilities—to $2.7 billion from its earlier estimated $2.5-billion net investment in February 2019.

The revised capital cost estimate, however, will not affect Pembina's previously announced 2020 capital budget, the operator said, adding that the contractor selection process for the complex’s PP unit remains ongoing.

Pembina said CKPC now expects the PDH-PP complex to enter commercial service during second-half 2023.

Once completed, the proposed complex will consume 23,000 b/d of Alberta-produced propane sourced from Pembina’s Redwater fractionation complex as well as other regional facilities, Pembina said in a February 2019 presentation to investors.

CKPC previously let a contract to Honeywell UOP LLC to license its proprietary C3 Oleflex technology for the complex’s production of polymer-grade PP (OGJ Online, June 11, 2017).

CKPC also awarded Jacobs Engineering Group Inc., Dallas, a contract to provide front-end engineering design services for the complex (OGJ Online, Dec. 5, 2017).