CKPC reaches FID for PDH-PP complex in Alberta
Canada Kuwait Petrochemical Corp. (CKPC), a joint venture of Pembina Pipeline Corp., Calgary, and Petrochemical Industries Co. KSC (PIC) of Kuwait, has reached final investment decision to move forward with construction of its proposed grassroots integrated propane dehydrogenation (PDH) and polypropylene (PP) upgrading complex in Sturgeon County, Alta. (OGJ Online, May 16, 2017).
To be built adjacent to Pembina’s Redwater fractionation complex (RFS) in Alberta’s Industrial Heartland inside the Western Canadian Sedimentary Basin, the $4.5-billion (Can.) PDH-PP complex will produce 550,000 tonnes/year of polymer-grade propylene—including impact and random copolymers—based on a feedstock of about 23,000 b/d Alberta-produced propane from Pembina’s RFS and other regional fractionation facilities, Pembina said.
Pembina's net investment of $2.5 billion represents a 50% interest in CKPC, which will own the PDH and PP plants, and a wholly and directly owned interest in the supporting installations under an agreement between Pembina and CKPC, whereby Pembina will own the installations and provide services under a long-term, take-or-pay arrangement, the operator said.
As part of the project financing, the government of Alberta has awarded CKPC $300 million of royalty credits, of which CKPC has, to date, entered into agreements with Alberta hydrocarbon producers to monetize more than 80% over the first several years of operation of the complex.
“Sanctioning of the PDH-PP [complex] is the largest step taken to date by Pembina in executing its strategy to secure global market prices for customers’ hydrocarbons produced in western Canada, and provides another exciting platform for future growth,” said Mick Dilger, Pembina’s president and chief executive officer, adding that the project is well-positioned to capitalize on Alberta’s abundant supply of propane and undertake value-added processing that benefits all of Pembina’s stakeholders, the Province of Alberta, as well as all of Canada.
The PDH-PP complex is scheduled to be in service in mid-2023, subject to environmental and regulatory approvals.
Final FID on the proposed CKPC complex follows the combine’s previous contract award to Jacobs Engineering Group Inc. for front-end engineering design services for the project, as well as a contract to Honeywell UOP LLC to license its proprietary C3 Oleflex technology for propylene production (OGJ Online, Dec. 5, 2017; July 11, 2017).
Contact Robert Brelsford at [email protected].
