Pembina to conduct study on proposed propane dehydrogenation facility

April 14, 2016 By    

Pembina Pipeline Corp. and the Petrochemical Industries Co. K.S.C. (PIC), a subsidiary of Kuwait Petroleum Corp., plan to put together a feasibility study for the evaluation of a world-scale combined propane dehydrogenation and polypropylene upgrading facility in Alberta, Canada.

According to Pembina, the project is an opportunity to develop new market demand for propane in Alberta. Over the past decade, about 85 percent of Alberta’s propane production has been exported across North America. The company adds that developing Alberta-based, value-added infrastructure will increase the area’s propane demand, benefiting Alberta’s oil and gas producers, as well as the province by increasing regional economic activity.

If the project moves forward beyond the study, Pembina says the facility could consume about 35,000 barrels per day (bpd) of propane and produce up to 800,000 metric tons per year of polypropylene. The polypropylene would be transported in a pellet form to markets across North America and internationally.

With access to the largest supply of propane in the Western Canadian Sedimentary Basin, Pembina says it is capable of facilitating this project’s development. Once the construction of Pembina’s remaining third fractionator is complete, the company says it will have more than 200,000 bpd of fractionation capacity and will control about 60,000 bpd of propane supply in the Fort Saskatchewan area of Canada.

Pembina and PIC will create a detailed technical, financial and commercial study to confirm whether the development of the project is economically feasible and aligns with each party’s investment criteria. Pembina adds that the study will take about six months, and the final investment toward the project will be complete in the middle of 2017. The project is expected to be in service by 2020, subject to Pembina’s board of directors’ approval.

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