CALGARY – CanadianManufacturing.com | Dan Healing – Canada’s slow-growing petrochemical industry is headed for its biggest surge of expansion spending in five years in 2019, thanks in large part to incentive programs by federal and provincial governments.
Capital spending on industrial chemical industry projects in Canada this year is expected to jump by 65 per cent to $1.9 billion, the highest since $2.2 billion in 2014 and third-highest in a decade, according to a year-end members survey by the Chemistry Industry Association of Canada, which represents producers of 75 per cent of the country’s chemical products by value.
Employment is expected to rise by about four per cent or 640 jobs to 17,670.
Capital spending in Canada this year will come mainly from construction already underway on two projects to turn petrochemicals produced with natural gas into plastic pellets: Inter Pipeline Ltd.’s $3.5-billion polypropylene project in central Alberta and the $2-billion expansion of Nova Chemicals Corp.’s polyethylene plant at Sarnia, Ont.
The former is to receive $200 million in royalty credits under a 2016 Alberta NDP government program – the latter is backed by $100 million through Ontario’s Jobs and Prosperity Fund and $35 million from Ottawa’s Strategic Investment Fund.
Last year, Alberta announced two programs worth $2.1 billion in royalty credits, grants and loans to encourage investments in petrochemical feedstock and manufacturing facilities. Winning bids are expected to be announced soon.
Meanwhile, a final investment decision is expected soon on a $4-billion polypropylene project by a joint venture of Calgary-based Pembina Pipeline Corp. and a subsidiary of Kuwait Petroleum Corp., eligible for $300 million in royalty credits under the 2016 Alberta program.
“Our made-in-Alberta plan means new projects must do the right thing for the environment, and by upgrading more here at home instead of shipping our raw product south of the border, we reduce emissions and ensure Alberta is among the most responsible and lowest emissions petrochemical producers in the world,” provincial Energy Minister Marg McCuaig-Boyd said in a statement.
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The Canadian Press
by Dan Healing