Government encouraging diversification in petrochemicals

by Morinville News Staff

The Government of Alberta launched its new $500 million Petrochemicals Diversification Program Monday morning, part of what the government says is its continued efforts to create jobs, attract investment and diversify Alberta’s economy.

The province is encouraging companies to invest in new Alberta petrochemical facilities in by providing royalty credits through a competitive application process to select petrochemical facilities.

As petrochemical facilities do not benefit from royalty credits because they do not pay royalties, credits earned by an approved facility can be traded or sold to an oil or natural gas producer who would use the credits to reduce their royalty payments to the government.

“Today’s commitment to diversification in the petrochemical sector is part of the government’s economic action plan—a plan to create jobs, diversify our economy and add more value to our resources,” said Deron Bilous, Minister of Economic Development and Trade in a release on the program. “This innovative program builds on the strengths of our energy industry and will attract new investment to our province.”

The government believes the program will support the construction of several methane or propane petrochemical facilities to produce materials for products, including plastics, detergents, and textiles.

The province is hoping the new facilities could create up to 3,000 new jobs during construction, and more than 1,000 jobs after operations commence.

“We know the majority of Albertans support further processing of our resources within provincial borders so we can benefit from the revenue and jobs,” said Ed Gibbons, Chair of Alberta’s Industrial Heartland Association. “Our Association strongly supports this program as part of the government’s long-term vision for economic growth and diversification.”

The association sees the addition of new petrochemical facilities as a much-needed market for the province’s natural gas resources rather than shipping lower-valued resources out of Alberta.

The program could draw $3 to $4 billion in investment in Alberta, something Neil Shelly, AIHA Executive Director says levels the field.

“We’ve talked to several international companies who are very keen on investing in Alberta, but our higher construction costs and distance from many consumer markets are a real challenge,” Shelly said. “This new program helps level the playing field. We anticipate it will be the tipping point for investors, and the scales will now point in the direction of Alberta.”

Eligibility criteria and information about the competitive selection process will be online Feb. 4 at

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