In a recent industry move, Kuwait’s Petrochemical Industries Co. (PIC) have entered into a joint venture with Canadian Pembina Pipeline for developing an integrated polypropylene plant in Alberta. The move maintains momentum of Kuwaiti downstream parastatals for overseas expansion.
Prior to this, PIC affiliate EQUATE Petrochemicals had acquired three Canadian petrochemical assets last year. After years of failure for overseas investments, the recent spate of investments by both PIC and sister company Kuwait Petroleum International (KPI) corroborates commitments for ventures in Bahrain, South Korea, and Oman.
Contract Stipulates Equal Stake of Participating Companies
The agreement between PIC and Pembina named Canada Kuwait Petrochemical Corp. (CKCP) will establish a 50:50 joint venture between the two organizations. The conglomeration is aimed at developing an integrated propylene dehydrogenation and polypropylene production unit in Sturgeon County in central Alberta. As per the terms of the contract, propane feedstock will be procured from Pembina Pipeline’s Redwater Fractionation Complex that is located nearby.
However, details pertaining to final cost estimates, timeframes, and execution plans are yet to be determined over the front-end engineering and design phase boosted by the latest agreement. According to provisional plans, production of more than 540,000 tons per year of poplyproplylene is envisaged from around 22,000 bpd of propane. Howbeit, the initial provisional pact that was carried out last year has estimations of 800,000 tons per year of polypropylene from 35,000 bpd of propane.
The timetable is a year behind the original announcement that was made after the joint feasibility study carried out in April 2016. At that point, approval for carrying out the front-end engineering and design phase was anticipated within six months. This was to be followed by final investment decision in mid-2017 and accomplishment by 2020.