Alberta relaunches incentive program to attract as much as $30 billion in petrochemicals sector
CALGARY – Alberta is relaunching a program offering petrochemical project grants and incentives in the hopes of attracting $30 billion in new investments over the next 10 years as it pushes to diversify its revenue streams from oil and gas royalties.
Alberta will open its redesigned Alberta Petrochemicals Incentive Program on Friday to replace the previous government’s Petrochemical Diversification Program. The new program offers companies that build petrochemical plants in the province grants worth up to 12 per cent of their capital costs, rather than royalty credits that had been offered under the previous program.
The government’s goal for the program is to attract $30 billion in new investment, but there are no specific goals for how many projects get built in the province, Alberta’s Associate Minister Dale Nally said in an interview.
“In the last 10 years, the U.S. has realized $250 billion in petrochemical investment. It shows the opportunity that’s out there. With the kind of numbers we’re talking about, it’s not an insignificant number and it’s substantial for the province, but it’s not unachievable,” Nally said.
The new petrochemical plants would also reduce Alberta’s provincial treasury reliance on non-renewable resource royalties and add to its corporate income tax base.
Under the previous program, Pembina Pipeline Corp. and Inter Pipeline Corp. applied and received royalty credits for two multi-billion projects that would turn propane into plastic pellets used in manufacturing. Both of the projects are now under construction.
Additional companies had also applied for funding from the provincial government for projects focused on ethylene or acrylic acid, that are key ingredients in a number of plastic products. Nally said companies that had applied under the previous program would have six months to determine if they’d rather have the royalty credits or the grants offered under the new program.
The provincial government is hoping the new program will attract applications for projects that would use a range of hydrocarbon-derived inputs, including hydrogen. Companies interested in building fertilizer plants could also apply for grants under the program.
“The opportunity for growth in this sector exists in the province and that is good news for jobs, new global-scale investment and Alberta’s economy,” Chemistry Industry Association of Canada president and CEO Bob Masterson said in a provincial government press release.
Most of the province’s existing petrochemical plants are built in and around Edmonton and the program could provide a further boost to the city’s economy, if new projects are built.
“The Alberta Petrochemicals Incentive Program will help bring much-needed investment to the Edmonton Metropolitan Region, diversify our petrochemical sector, create jobs, and boost our economic recovery,” Edmonton Chamber of Commerce president and CEO Janet Riopel said in the same release.
• Email: gmorgan@nationalpost.com | Twitter: geoffreymorgan