Calgary energy firm backs away from proposed $4B northern Alberta methanol plant

Nauticol Energy Ltd. has confirmed it will not be moving forward with its plans to build the $4B manufacturing plant on land about 10 kilometres south of Grande Prairie.

Nauticol Energy CEO says smaller-scale development near Grande Prairie is possible

An artist's rendering of a petrochemical plant, shown from above.
An image of a proposed methanol plant near Grande Prairie, Alta. (Nauticol Energy Ltd.)

Calgary-based Nauticol Energy Ltd. has confirmed it will not be moving forward with a proposed $4-billion net-zero blue methanol plant near Grande Prairie.

The company had planned to build the plant in the County of Grande Prairie, about 10 kilometres south of the city. Announced in 2018, it would have begun operating in 2025.

The plant would have created methanol from natural gas. In 2021, Nauticol announced plans to add carbon-capture technology.

Nauticol president and CEO Mark Tonner said the pandemic created headwinds for the project.

"Some of the headwinds that we encountered were just costing us too much time and money to overcome," Tonner said in an interview with CBC News.

"So these obviously include enduring two years of a global pandemic and the upheaval in the capital markets. There's significantly less appetite for risk and uncertainty compared to when we launched the project.

"And over the last few months, we've been working closely with some of our First Nation partners to review alternative paths."

The methanol project had been supported by the Western Cree Tribal Council.

Smaller plant possible

Tonner said no final decision has been made on the future of the site. 

"It is entirely possible that a scaled-down net-zero methanol plant may very well be proceeding on the site," he said.

The project promised up to 5,000 jobs during construction and another 200 highly skilled permanent positions, according to an archived version of Nauticol's website, which has been taken down.

No public funds have been provided to the methanol project, according to a statement from Alberta Energy.

However, the province said the Alberta Petrochemicals Incentive Program (APIP) could have provided hundreds of millions of dollars in grant funding after the plant was operational.

"Nauticol Energy had applied through APIP and received advance notification approval, noting their project had been evaluated and met all the eligibility requirements set out by the guidelines," the statement said.

The government said it will "continue to encourage investment and creating jobs" using the petrochemical incentive program.

NDP energy critic Kathleen Ganley said the government should try to save the methanol project.

"All indications were that this was going to create ... renewable energy products and a lot of jobs," Ganley said in an interview.

Tonner said the cost of the methanol plant just kept increasing. 

"We had two divergent things happening: less appetite for risk and a higher requirement for granularity," he said. 

The project was originally announced with a $2-billion cost, but the latest figures showed the price tag had doubled. 

While Nauticol has bowed out, Tonner said there is still opportunity for a scaled-down development. He said a smaller project could also expand in the future. 

"Appetite for risk changes, need for energy security changes," he said.

"I believe in Grande Prairie."


Luke Ettinger is a video journalist working for CBC Edmonton in Grande Prairie. Reach him at luke.ettinger@cbc.ca.