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Alberta

With a boost of up to $200 million from the Province, Inter Pipeline Ltd. investing $600 million in new petrochemical plant east of Edmonton

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Premier Notley announces private investment in a new petrochemical upgrading facility alongside David Chappell (r), Patrick Bergen and Pyramid Prefab Piping staff.

From the Province of Alberta

Made-in-Alberta plan attracts new jobs, investment

Alberta is taking a significant step forward on a more diversified economy with a project that supports hundreds of jobs and adds more value to our energy resources.

If the plan is finalized, Inter Pipeline Ltd. would invest about $600 million in a new petrochemical upgrading facility that would produce more valuable consumer products derived from propane, including acrylic acid that is used in many everyday consumer products. This major private investment is unlocked by support from Premier Rachel Notley’s Made-in-Alberta energy diversification strategy.

The project would build on the company’s supply and knowledge of propylene, a product it already produces at the company’s other petrochemical facilities east of Edmonton. Construction would create about 600 jobs with another 50 long-term positions supporting the local economy once the facility is fully up and running.

“For decades, Albertans settled for less while new jobs and investment went south of the border. So we’re grabbing the bull by the horns, fighting for a Made-in-Alberta plan that represents the single largest energy diversification effort since the days of Peter Lougheed. We’re proud to support upgrading projects like Inter Pipeline’s because they mean more good jobs and top dollar for the energy resources that belong to all Albertans.”

Rachel Notley, Premier

Inter Pipeline’s supply of propylene, a gas that results from adding value to raw propane, creates the opportunity to further leverage Alberta’s natural resource strengths and extend the value chain. By producing acrylic acid used in things like adhesives, floor polishes and paints, this project increases the likelihood of attracting investments in more manufacturing facilities in the future.

“Alberta’s abundance of natural resources has positioned Inter Pipeline to invest in opportunities like this that build on our strengths to extend the value chain and make products that are in demand around the world. We want to commend this government for fostering the environment for companies like ours to grow and create jobs, while competitively positioning our business in the world market.”

David Chappell, senior vice-president, Petrochemical Development, Inter Pipeline Ltd.

The announcement was made at Pyramid Prefab Piping, one of the hundreds of companies across the province benefiting from the Made-in-Alberta strategy. As a manufacturer that employs about 45 people in Calgary, Pyramid was contracted to build key components for Inter Pipeline’s project already under construction.

“We’re pleased to see the government’s vision for the future is focused on jobs and diversification, which will lead to more work for companies like ours to build the components needed for energy upgrading projects. This growth means we can put even more skilled tradespeople to work in the Calgary region and contribute even more to the oil and gas sector.”

Patrick Bergen, president, Pyramid Prefab Piping

If finalized by Inter Pipeline, the private investment would be unlocked by provincial support of up to $70 million in future royalty credits under the Petrochemicals Diversification Program, which was first developed in early 2016.

Quick facts

  • Inter Pipeline’s acrylic acid and propylene derivatives facility would be in Alberta’s Industrial Heartland, northeast of Edmonton. Construction is expected to begin in 2021.
  • The facility would convert 60,000 tonnes per year of propylene and produce 80,000 tonnes per year of propylene derivatives, including acrylic acid, when operational.
  • Acrylic acid is a value-added product used to make coatings, adhesives, diapers, floor polishes and paints.
  • Roughly 50 skilled, local permanent jobs and 600 skilled trade construction jobs would be created.
  • Inter Pipeline has already been approved to receive up to $200 million in future royalty credits from the first round of the Petrochemicals Diversification Program for the construction its $3.5-billion Heartland Petrochemical Complex.

Background

Made-in-Alberta energy strategy

  • Premier Notley’s government is investing $3 billion to support energy diversification that creates jobs and adds value to our resources here at home.
  • The focus is on two key areas: partial upgrading of our bitumen and petrochemical processing that adds value to natural gas and natural gas liquids.
  • Overall, this commitment is expected to attract more than $25 billion in private-sector investment to Alberta and create more than 20,000 jobs.

Petrochemical upgrading

  • Support for the Inter Pipeline facility is provided under the petrochemical portion of the Made-in-Alberta strategy.
  • Two projects – owned by the Canada-Kuwait Petrochemical Corporation and Inter Pipeline Ltd. – were selected under the first round of this program, which was announced in 2016. The projects combined for $8 billion in private investment, creating more than 5,000 jobs.
  • The government announced a second round of support for petrochemical upgrading in 2018.
    • Nauticol’s methanol facility was previously selected under the second round of this program. The entire project is a $2-billion private investment in a plant near Grande Prairie, creating roughly 3,000 direct and indirect jobs.
  • Albertans and Canadians use dozens of products every day that are based in part on petrochemicals like those from Alberta’s growing value-added industry including:
    • polyester fabric couches, HD televisions, phones coffeemakers and computers
    • car tires, engine hoses, gas, oil, radio components and seats
    • desks, chairs, computers, carpets, cellphones and other office supplies

Partial upgrading of bitumen

  • $1 billion in grants and loan guarantees to encourage companies to invest in new or expanded bitumen-upgrading facilities.
  • Partial upgrading reduces the thickness of oil sands bitumen so it can flow through pipelines more easily, without having to be blended with diluent or as much diluent, a thinning agent. Benefits include:
    • increased prices for our resources before shipping
    • up to 30 per cent more capacity on existing pipelines
    • more world refineries capable of processing our product
    • cost savings on diluent for industry
    • fewer emissions by removing high carbon content

Energy diversification timeline

  • January 2016 – Royalty Review Advisory Panel recommended more value-add within the province, including partial upgrading
  • February 2016 – Petrochemicals Diversification Program (PDP) introduced
  • October 2016 – Energy Diversification Advisory Committee (EDAC) formed
  • December 2016 – First PDP projects awarded
  • December 2017 – Inter Pipeline finalized investment in petrochemical project
  • February 2018 – EDAC reported back, including recommendation of partial upgrading, more PDP and additional support for petrochemical feedstock infrastructure
  • March 2018 – Government launched programs through the Energy Diversification Act
  • Fall 2018 – oil price differential hit crisis point. In response, government took several actions:
    • Temporary limit on oil production
    • Doubled support for PDP
    • Began crude-by-rail negotiations
    • Appointed LNG Investment Team
    • Request for industry interest in building refining capacity
  • January 2019 – Government announced letter of intent for first partial upgrading project awarded (Value Creation Inc.)
  • February 2019 – Canada-Kuwait Petrochemical Corporation  finalized investment in petrochemical project
  • February 2019 – Premier announced crude-by-rail agreements
  • February 2019 – Nauticol awarded first project under second round of PDP

After 15 years as a TV reporter with Global and CBC and as news director of RDTV in Red Deer, Duane set out on his own 2008 as a visual storyteller. During this period, he became fascinated with a burgeoning online world and how it could better serve local communities. This fascination led to Todayville, launched in 2016.

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Alberta

Alberta requests more control over provincial immigration system

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Alberta is requesting more control over its provincial immigration to address its skilled workforce shortage, including increasing Ukrainian evacuee participation in the job market.

Premier Danielle Smith has written a letter to Prime Minister Justin Trudeau asking him to re-evaluate his government’s decision limiting the number of allocations for Alberta’s provincial nominee program in 2024. Last week, the federal government informed the province it would only receive 9,750 such allotments – which is the same number of allocations Alberta received in 2023 and is less than the 10,140 for 2024 the federal government had originally allocated.

As of February 2024, Alberta accounts for just under 12 per cent of Canada’s population, but it leads the nation in net employment growth, with 42.8 per cent of the country’s employment gains between January and February 2024. By not providing the requested increase to Alberta’s provincial nominee allocations, the federal government is restricting the province’s ability to keep up with its growing labour market demands, especially as it relates to integrating Ukrainian evacuees into Alberta’s job market.

“Alberta is growing and that is good news. Since January 2023, more than 100,000 new jobs have been created in our province and our employment rate has led the country even longer. At the same time, we continue to experience labour shortages that could be resolved by welcoming skilled workers from around the world, including evacuees from Ukraine, many of whom have the exact skills that our job market most needs. Alberta has long been the economic engine of Canada and we are once again requesting Ottawa respect section 95 of the Constitution and let us welcome the skilled individuals we need into our province on our terms.”

Danielle Smith, Premier

With Alberta’s population growth at levels not seen in four decades, Alberta’s Provincial Nominee Program is best placed to address the province’s unique immigration and economic goals.

Part of Alberta’s population growth has resulted from Russia’s invasion in Ukraine on February 24, 2022. Since that time, Alberta has welcomed a significant number of Ukrainian evacuees to the province. While it is anticipated that many will return to Ukraine following the war, Alberta is also expecting a number of families to apply for permanent residency via the Alberta Advantage Immigration Program. An increase in the number of allocations from the federal government would assist these new Albertans to fill positions in the province’s workforce.

“Immigration is key to Alberta’s ability to address labour shortages and to grow our economy. This limitation imposed by the federal government on our provincial nominee program will be a very difficult pill to swallow, not only for businesses that need this skilled labour but also to the many Ukrainian evacuees who have the skills we need and wish to stay permanently in Alberta.”

Muhammad Yaseen, Minister of Immigration and Multiculturalism

Quick facts

  • The federal government through Immigration, Refugees and Citizenship Canada sets provincial immigration nomination limits. It also approves all permanent resident applications.
  • Alberta maximized its 9,750 nomination allocations in 2023, with a total of 10,029 nominations issued within the federal government administrative buffer.

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Alberta

Oil and gas in the global economy through 2050

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From the Canadian Energy Centre

By Ven Venkatachalam

The world will continue to rely on oil and gas for decades to come, according to the International Energy Agency

Recent global conflicts, which have been partly responsible for a global spike in energy prices, have cast their shadow on energy markets around the world. Added to this uncertainty is the ongoing debate among policymakers and public institutions in various jurisdictions about the role of traditional forms of energy in the global economy.

One widely quoted study influencing the debate is the International Energy Agency’s (IEA) World Energy Outlook, the most recent edition of which, World Energy Outlook 2023 (or WEO 2023), was released recently (IEA 2023).

In this CEC Fact Sheet, we examine projections for oil and natural gas production, demand, and investment drawn from the World Energy Outlook 2023 Extended Dataset, using the IEA’s modelled scenario STEPS, or the Stated Policies Scenario. The Extended Dataset provides more detailed data at the global, regional, and country level than that found in the main report.

The IEA’s World Energy Outlook and the various scenarios

Every year the IEA releases its annual energy outlook. The report looks at recent energy supply and demand, and projects the investment outlook for oil and gas over the next three decades. The World Energy Outlook makes use of a scenario approach to examine future energy trends. WEO 2023 models three scenarios: the Net Zero Emissions by 2050 Scenario (NZE), the Announced Pledges Scenario (APS), and the Stated Policies Scenario (STEPS).

STEPS appears to be the most plausible scenario because it is based on the world’s current trajectory, rather than the other scenarios set out in the WEO 2023, including the APS and the NZE. According to the IEA:

The Stated Policies Scenario is based on current policy settings and also considers the implications of industrial policies that support clean energy supply chains as well as measures related to energy and climate. (2023, p. 79; emphasis by author)

and

STEPS looks in detail at what [governments] are actually doing to reach their targets and objectives across the energy economy. Outcomes in the STEPS reflect a detailed sector-by-sector review of the policies and measures that are actually in place or that have been announced; aspirational energy or climate targets are not automatically assumed to be met. (2023, p. 92)

Key results

The key results of STEPS, drawn from the IEA’s Extended Dataset, indicate that the oil and gas industry is not going into decline over the next decade—neither worldwide generally, nor in Canada specifically. In fact, the demand for oil and gas in emerging and developing economies under STEPS will remain robust through 2050.

Oil and natural gas production projections under STEPS

World oil production is projected to increase from 94.8 million barrels per day (mb/d) in 2022 to 97.2 mb/d in 2035, before falling slightly to 94.5 mb/d in 2050 (see Figure 1).

Source: IEA (2023b)

Canadian overall crude oil production is projected to increase from 5.8 mb/d in 2022 to 6.5 mb/d in 2035, before falling to 5.6 mb/d in 2050 (see Figure 2).

Source: IEA (2023b)

Canadian oil sands production is expected to increase from 3.6 mb/d in 2022 to 3.8 mb/d in 2035, and maintain the same production level till 2050 (see Figure 3).

Source: IEA (2023b)

World natural gas production is anticipated to increase from 4,138 billion cubic metres (bcm) in 2022 to 4,173 bcm in 2050 (see Figure 4).

Source: IEA (2023b)

Canadian natural gas production is projected to decrease from 204 bcm in 2022 to 194 bcm in 2050 (see Figure 5).

Source: IEA (2023b)

Oil demand under STEPS

World demand for oil is projected to increase from 96.5 mb/d in 2022 to 97.4 mb/d by 2050 (see Tables 1A and 1B). Demand in Africa for oil is expected to increase from 4.0 mb/d in 2022 to 7.7 mb/d in 2050. Demand for oil in the Asia-Pacific is projected to increase from 32.9 mb/d in 2022 to 35.1 mb/d in 2050. Demand for oil from emerging and developing economies is anticipated to increase from 47.9 mb/d in 2022 to 59.3 mb/d in 2050.

Source: IEA (2023b)

 

Source: IEA (2023b)

Natural gas demand under STEPS

World demand for natural gas is expected to increase from 4,159 billion cubic metres (bcm) in 2022 to 4,179 bcm in 2050 (see Figures 6 and 7). Demand in Africa for natural gas is projected to increase from 170 bcm in 2020 to 277 bcm in 2050. Demand in the Asia-Pacific for natural gas is anticipated to increase from 900 bcm in 2020 to 1,119 bcm in 2050.

Source: IEA (2023b)

 

Source: IEA (2023b)

Cumulative oil and gas investment expected to be over $21 trillion

Taking into account projected global demand, between 2023 and 2050 the cumulative global oil and gas investment (upstream, midstream, and downstream) under STEPS is expected to reach nearly U.S.$21.1 trillion (in $2022). Global oil investment alone is expected to be over U.S.$13.1 trillion and natural gas investment is predicted to be over $8.0 trillion (see Figure 8).

Between 2023 and 2050, total oil and gas investment in North America (Canada, the U.S., and Mexico) is expected to be nearly U.S.$5.6 trillion, split between oil at over $3.8 trillion and gas at nearly $1.8 trillion (see Figure 8). Oil and gas investment in the Asia Pacific, over the same period, is estimated at nearly $3.3 trillion, split between oil at over $1.4 trillion and gas at over $1.9 trillion.

Source: IEA (2023b)

Conclusion

The sector-by-sector measures that governments worldwide have put in place and the specific policy initiatives that support clean energy policy, i.e., the Stated Policies Scenario (STEPS), both show oil and gas continuing to play a major role in the global economy through 2050. Key data points on production and demand drawn from the IEA’s WEO 2023 Extended Dataset confirm this trend.

Positioning Canada as a secure and reliable oil and gas supplier can and must be part of the medium- to long-term solution to meeting the oil and gas demands of the U.S., Europe, Asia and other regions as part of a concerted move supporting energy security.

The need for stable energy, which is something that oil and natural gas provide, is critical to a global economy whose population is set to grow by another 2 billion people by 2050. Along with the increasing population comes rising incomes, and with them comes a heightened demand for oil and natural gas, particularly in many emerging and developing economies in Africa, the Asia-Pacific, and Latin America, where countries are seeing urbanization and industrialization grow rapidly.


References (as of February 11, 2024)

International Energy Agency (IEA), 2023(a), World Energy Outlook 2023 <http://tinyurl.com/4nv9xyfj>; International Energy Agency (IEA), 2023(b), World Energy Outlook 2023 Extended Dataset <http://tinyurl.com/3222553b>.

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