Alberta offers cash in push to become top global petrochemical producer
Alberta Petrochemical Incentive Program covers up to 12% of capital costs for projects
The Alberta government says it's prepared to give billions of dollars to lure investors willing to build or expand petrochemical facilities in the province, part of what it says is a push to be a top global player in the field.
In a news release introducing the new Alberta Petrochemicals Incentive Program, the government says it hopes to grow the sector by more than $30 billion by 2030 and compete with jurisdictions across Asia, the Middle East and the U.S. areas of the Gulf of Mexico.
"On top of our existing petrochemical producers and all the companies that feed in and support them, we have a multi-generational supply of natural gas, an experienced workforce, and one of the lowest tax rates in North America," said Dale Nally, the associate minister of natural gas and electricity, in the news release.
"By launching this program, Alberta moves towards achieving the goal of becoming one of the most attractive investment opportunities for petrochemicals in the world."
The program would offer grants of up to 12 per cent of eligible capital costs for new projects in the province. That money will be offered only in the final stages of construction in order to ensure projects are already built.
The minimum investment required to be eligible is $50 million, with no upper limit, and the project must consume natural gas, natural gas liquids or petrochemical "intermediaries," and create new and permanent jobs in the province.
The window for applications on projects between $50 million and $150 million will be open for five years, and 10 years for projects over that threshold.
Hydrogen facilities will be eligible for the grants and there is no cap on the number of projects.
"Alberta has the potential to become a major player in low-carbon hydrogen and sustainable plastics production, but we'll only get there if we have a competitive edge over other jurisdictions," said Doug Schweitzer, the minister of jobs, economy and innovation, in the news release.
The government estimates it could create over 90,000 direct and indirect jobs and bring in $10 billion for the government if it hits the target of growing the sector by $30 billion.
On Friday, the Globe and Mail reported that the province was in talks with a private firm from Saudi Arabia to build a $5-billion petrochemical facility in Alberta.
"From Day 1, we have said that we are going to seek out international investors to create jobs in Alberta. We are pleased to see that interest has been expressed by a number of global companies from different regions," said Jennifer Henshaw, a spokesperson for Nally, in response to questions about the Globe article.
"We hope to have more to say in the months to come but cannot comment any further at this time due to confidentiality and commercial sensitivities."