Pembina Pipeline and Petrochemical Industries Company (PIC) of Kuwait have executed a lump sum engineering, procurement and construction (EPC) contract with Canadian Kuwait Petrochemical (CKPC) for a petrochemical facility in Canada.
In February 2019, Pembina and PIC reached an agreement to establish a C$4.5bn ($3.41bn) integrated petrochemical facility in Alberta, Canada.
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CKPC is a joint venture between Pembina Pipeline and PIC formed in 2017.
The latest contract includes construction of a propane dehydrogenation (PDH) facility within the company’s integrated PDH and polypropylene (PP) upgrading facility (PDH/PP Facility).
CKPC expects to put the PDH/PP facility into commercial operations in the second half of 2023.
Once operational, the plant will use propane as its feedstock, convert it into propylene and then further process it into polypropylene.
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By GlobalDataNearly 550,000 metric tonnes per annum of polymer-grade propylene and polypropylene are expected to be produced at the facility, which will consume 23,000 barrels per day of propane consumed from pipeline-connected natural gas liquids fractionation facilities.
The signing of this contract indicates that the cost certainty for nearly 60% of the project has been finalised.
Additionally, the company has also revised its proportionate share of the capital cost of the project to C$2.7bn ($2.08bn). It includes 100% of the directly-owned supporting facilities.
Pembina president and CEO Mick Dilger said: “When faced with the proposition of trading returns for risk, Pembina has consistently chosen certainty and downside protection, particularly in new platforms or new businesses. Our relentless pursuit of a lump sum contract for the PDH facility reflects our disciplined and prudent approach to capital allocation.”
“This project is highly strategic for Pembina and our producer customers in the Western Canadian Sedimentary Basin. It offers a new demand source for domestically produced propane and supports ongoing development of Canada’s world-class hydrocarbon resources.”
For the PDH facility, CKPC has selected Heartland Canada Partners as the EPC contractor. Heartland is a partnership between Fluor Canada and Kiewit Construction Services. The selection process for the PP facility is still underway.
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Pembina awards EPC contract for new Canadian petrochemical facility. (Credit: Pixabay/James Glen)
