A $2.7 billion investment creates a first for Alberta's energy sector

Dec. 19 (UPI) -- A $2.7 billion decision to create a first-of-its-kind petrochemicals plant in Alberta is a shot in the arm for diversification efforts, the government said.

Calgary-based Inter Pipeline Ltd. said it made a final investment decision to create the Heartland petrochemical complex, which would convert propane into polypropylene, a component used in the manufacturing of plastic products.

Provincial leaders said the company will get royalty credits under a diversification scheme meant to build up the petrochemical component of the energy sector in the region, which holds some of the largest oil deposits in the world.

"Seeing this project proceed is just another step in our government's plan to increase competitiveness, diversify the type of energy products we produce in Alberta and create lasting benefits for the modern Alberta economy," Economic Minister Deron Bilous said in a statement.

By provincial estimates, that plant will create 2,300 jobs during the construction phase and 180 full-time jobs once its completed in late 2021.

The provincial economy, bruised by the low price of oil and wildfires last year, is on pace to show a growth rate of gross domestic product of 4 percent for the year. First quarter growth was 3.1 percent and the latest estimate is the second time this year the provincial growth projection was revised higher.

So far, the government is $78 million (USD) away from its goal of saving $312 million in administrative costs. A salary freeze is already in place.

A climate support effort, meanwhile, provides $347 million for the oil sands industry to support ways to stimulate production, while at the same time cutting emissions and adjusting to new rules for large emitters expected from the provincial government before the year is out.

The investment from Inter Pipeline is its largest in corporate history. Once up and running, the company said it could generate a half billion dollars in revenue.

"Driven by attractive feedstock and utility costs, the Heartland complex is expected to be one of the lowest cost polypropylene producers in North America," President and CEO Christian Bayle said in a statement.