Pembina to source abundant Alberta propane for new petrochemical facility

February 13, 2019 By    

Pembina Pipeline Corp. and Petrochemical Industries Co. K.S.C. of Kuwait made a positive final investment decision to construct a 550,000-metric-tons-per-annum integrated propane dehydrogenation (PDH) plant and polypropylene (PP) upgrading facility through their equally-owned joint venture, Canada Kuwait Petrochemical Corp. (CKPC).

CKPC brings together two organizations united in developing and operating a world-scale Alberta PDH/PP facility. Petrochemical Industries brings comprehensive PDH and PP project experience, along with diversified global petrochemical marketing expertise. Pembina will manage long-term propane supply and provide Alberta-specific operating and project execution experience, feedstock connectivity and strong producer relationships.

The PDH/PP facility will be located in Alberta’s Industrial Heartland, adjacent to Pembina’s Redwater fractionation complex and will consume about 23,000 barrels per day of local propane from Redwater and other regional fractionation facilities. Located in the Western Canadian Sedimentary Basin, the facility will have long-term access to an abundant supply of propane feedstock.

“Sanctioning of the PDH/PP facility is the largest step taken to date by Pembina in executing its strategy to secure global market prices for customers’ hydrocarbons produced in western Canada, and provides another exciting platform for future growth,” says Mick Dilger, Pembina’s president and CEO. “[This] announcement is the culmination of many years of hard work with our partner to develop a project that is well positioned to capitalize on Alberta’s abundant supply of propane and undertake value-added processing that benefits all of Pembina’s stakeholders, the province of Alberta and all of Canada.”

The PDH/PP facility has a nameplate capacity of 550,000 metric tons of PP per year, including impact and random copolymers. PP is a high-value polymer that can be cost-effectively transported throughout North America and to global markets using existing third-party infrastructure. PP is fully recyclable and can be used in a wide range of finished products, including automobiles, medical devices, food packaging and home electronic appliances. The market for PP continues to see favorable long-term fundamentals, with global PP demand growth outpacing global economic growth.

The PDH/PP facility is expected to be in service in mid-2023, subject to environmental and regulatory approvals, and is expected to generate annual run-rate Adjusted EBITDA of $275 to $350 million, net to Pembina.

* Featured image courtesy of Pembina

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About the Author:

Brian Richesson is the editor in chief of LP Gas Magazine. Contact him at or 216-706-3748.

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