A proposed propylene plant near Redwater could bring some $700 million in investment to Sturgeon County if it's built.
The petrochemical company Williams Energy Canada announced last week that it was looking to build a propane de-hydrogenation plant near its existing operations near Redwater.
The plant, if built, would be the first of its kind in Canada, and would transform propane into propylene — a gas that's used to make polypropylene plastic. It would cost $600 to $800 million.
Propylene is in high demand and short supply right now, explained Williams Energy Canada president David Chappell, and there are only a handful of propylene plants in North America. "Propylene is two to three times the value of propane," he added, and there's already a glut of propane in the U.S.
Since Williams already produces propane at its Redwater site, Chappell said, it's an ideal place for a propylene plant. "It's a natural extension of our business."
This is really exciting, said county Mayor Don Rigney, who recalled how DuPont proposed a similar plant here back in the 1970s. "Polypropylene is the Cadillac of the propane industry, and it could be a huge multiplier for the Edmonton region."
From gas to plastic
Propylene is a colourless, flammable gas made from petroleum that's often made into polypropylene. Propylene glycol is used to de-ice airplanes.
Polypropylene is a versatile plastic used in carpets, bottle caps, yoghurt containers and other products, according to the American Chemistry Council. It's otherwise known as No. 5 plastic.
Williams currently pipes mixed gases from the oilsands to its Redwater plant, Chappell said, where the gases are separated into propane, propylene and other substances. This proposed de-hydrogenator will strip hydrogen off that propane to turn it into more propylene.
The Redwater plant currently cranks out about 2,500 barrels (about 3.5 train cars) of propylene a day, Chappell continued, which it ships to the U.S. The new plant would boost this to about 15,000 barrels a day, or about 21 train cars — enough to support a plastics plant should someone build one in the region. It would also produce a fair bit of hydrogen that could be sold to nearby upgraders (such as Shell Scotford).
The company now has to settle on the size of and technology for the plant before it decides if it wants to build it, Chappell said. Williams planned to finance the project out of its own pocket.
Rigney said he was optimistic that the plant would go ahead. "The biggest frustration has been the regulatory approval," he added. "When you can get the same thing approved in Louisiana in four months where it seems to take two-to-four years here, that's been the biggest impediment." Premier Alison Redford recently committed to streamlining this approval process, he said.
Besides the millions in investment, Rigney estimated that this proposed project could bring about 400 construction and 70 permanent jobs to the county. (Williams has yet to release precise job and tax revenue figures for the project.) It would also build on the $230-million de-ethanizer tower Williams announced last year at its Redwater plant.
"We're shipping so much wealth out of our province," said Rigney, who has long advocated for more value-added development in Alberta such as upgraders. "We're not capturing the full value of our natural resources." Investments such as this would help diversify Alberta's economy and help us get the most out of our oil.
Williams would likely make a decision on the plant next year, Chappell said. If it gets the go-ahead and regulatory approval, it could be up and running by 2015.
Questions on the project should go to Sara Delgado at 918-573-2713.
