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U.S. energy giant Williams Companies has announced a new $900 million project in Strathcona County, Alberta. The Tulsa, Okla.-based firm is going to open a propane dehydrogenation (PDH) facility, located near its existing complex in Redwater, according to the Edmonton Journal.
Williams has already invested $1.7 billion over the past decade in Canada through its subsidiary Williams Energy Canada. Thanks to its large-scale investments, the company is the only business globally that processes oilsands offgas to extract products like propane, butane and condensate. The company has a market value of $24 billion and employs around 4,200 people, which makes it one of the major players on the North American energy market.
The new petrochemical facility is just going to enhance its position as a market leader, Williams hopes. The plant is currently awaiting regulatory approval and is set to be completed in the second quarter of 2016. The PDH facility will enable the company to dramatically increase output of polymer-grade propylene, an important petrochemical feedstock used in plastics manufacturing. Initially, the facility is planned to produce about 500 kilotons (1.1 billion pounds) every year, which would be shipped to petrochemical plants on the U.S. Gulf Coast by rail. Williams Energy Canada chief David Chappell estimated that this could generate annual revenues of over $800 million, if current prices remain unchanged.
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As promising as these figures sound, Williams stated that this was just its base plan. The company is also working on a more ambitious scenario that would yield far more revenues, not just for the company itself but for the entire petrochemical industry in Alberta. According to Williams, its plan to boost propylene production has already attracted the interest of a number of major global plastics manufacturers who remain unnamed so far. They are exploring the possibilities of using the propylene feedstock that Williams' facility will produce as a foundation upon which they could build new polypropylene plants in Alberta.
If this plan gets implemented, it could add great value to raw bitumen production in Atlanta and set favorable conditions for diversifying and broadening the provincial economy. Chappell thinks that the scheme would be "a new value chain" for the province. Williams will be using propane to produce propylene and other companies would use that propylene to make polypropylene -- a type of plastic that is commonly used in food packaging. It can also be turned into propylene glycol, which is environmentally friendly antifreeze, used for remove ice from aircraft, Chappell explained.
These products are currently not produced in Canada but the country consumes plenty of them. Most of the demand is met by imports from the U.S. Gulf Coast. The new petrochemical chain could be a game-changer for Canada, Chappell concluded.
His opinion seems to be shared by energy minister Ken Hughes, who stated that the project has the potential to spur a whole new industry for Alberta and give the province valuable business growth opportunities.