Alberta backs petrochemicals, pipeline projects; New refinery planned for South Texas
Petrochemicals news you need to know
Alberta backs petrochemicals, pipeline projects
Alberta’s government has approved the granting of CA$500 million ($375 million) in royalty credits toward two separate petrochemical projects.
The projects were approved under the Canadian province’s Petrochemicals Diversification Program, which began receiving applications in February 2016.
A joint venture between Pembina Pipeline Corporation and Petrochemical Industries Company (PIC) will receive up to CA$300 million in royalty credits to build an integrated propylene and polypropylene facility in Sturgeon County. The project is expected to cost CA$3.8 billion to CA$4.2 billion to build.
During construction of the Pembina/PIC facility, an average of 2,000 to 2,500 workers are expected on site, with more than 150 full-time operations and head office jobs upon completion. The facility will process about 22,000 barrels per day of propane into polypropylene, the plastic material used in the manufacturing of a variety of products such as automobile parts, containers and Canadian bank notes. Construction is expected to start in 2019, with the facility operating by 2021.
The second project, by Inter Pipeline, will receive up to CA$200 million in royalty credits to build a CA$1.85-billion facility in Alberta’s Strathcona County. At the peak of the three-year construction phase 2,000 full-time equivalent jobs will be created. About 1,600 of those will be at the site and the rest in fabrication or module shops and engineering firms. It is expected an additional 95 full-time operations positions will be created upon project startup.
The Inter Pipeline facility will process about 22,000 bbl/d of propane into propylene. Construction is expected to start in 2017, with the facility operating in 2021.
New refinery planned for South Texas
Raven Petroleum, a newly formed subsidiary of Raven Resources Group, has announced plans to build a $500 million oil refinery just outside of Laredo in Duval County in South Texas.
The South Texas Energy Complex will refine 50,000 bbl/d of Eagle Ford shale light crude oil and will have 4 MMbbl of additional storage tank capacity. It will produce the following products for export: diesel fuel, jet fuel, naphtha, gasoline, LGP gas products.
The new refinery will have direct rail access to Mexico via the Kansas City Southern rail network, according to Raven. Two pipelines bisect the property, and there is adjacent highway access. The property has 200 acres, with an additional 632 acres available for co-development.
Duval County expects 1,500 construction jobs and 300 permanent jobs will be created from the building of the refinery.
The South Texas Energy Complex will be located near Laredo (Image credit: Raven Petroleum)
Aramco to almost triple chemicals production by 2030
Saudi Aramco aims to almost triple its chemicals production to 34 million metric tons per year by 2030, a senior company executive said at a conference in Dubai.
“In chemicals, our equity capacity, across our global operations, is expected to grow from 13 million metric tons per year to 34 million,” Abdulaziz al-Judaimi, the head of the state-owned oil company’s downstream business line, was reported as saying by Reuters.
Over the same period Aramco intends to lift its global refining period from the current 5 MMbbl/d to some 8-10 MMbbl/d, Reuters reported. The company’s oil-production capacity stands at 12 MMbbl/d.
Sadara Chemical, a joint venture between Aramco and Dow Chemical, was inaugurated last week by King Salman of Saudi Arabia. The Sadara complex is being built in a single phase at a total investment of about $20 billion. Once complete, it will consist of 26 integrated manufacturing plants with the capacity to manufacture more than 3 mtpa of high-value performance plastics and specialty chemical products.
Fitch sees higher prices for petrochemicals, plastics
Prices for petrochemicals, plastics and other chemicals should rise in 2017 on the back of modest price increases in the energy sector, according to a report from Fitch Ratings.
“Market conditions support stable operating profiles for North American chemical companies in 2017, as most rated issuers have solid financial profiles and robust liquidity… Producers should benefit from solid recovery in U.S. construction and consumption,” Fitch said.
Ethylene, propylene and methanol prices have seen a small uptick in the second half of 2016 as demand and feedstock prices have risen – reversing significant price declines in 2015, according to IHS Chemical.