Insights Into the Petrochemical Industry in Alberta
Alberta is home to the largest oil refining as well as petrochemical manufacturing cluster in Canada. Each year, the petrochemical industry in the province produces more than $9.5 billion worth of petrochemical products. Most of the manufacturing plants have world-class equipment and technology and unhindered access to feedstock. Coupled with this, the five petrochemical hubs have rail connectivity to meet the needs of consumers within the country and overseas. Most of the exports are to North America but Albert also exports to China and other emerging economies.
The Key Petrochemical Products in Alberta
The petrochemical industry in Alberta focuses primarily on the manufacturing of the following products:
Natural Gas: Nearly 68% of natural gas in Canada is produced in Alberta. The province is a major exporter of natural gas, and many of the natural gas liquid products are available at a discounted price when compared to the prices in the US. As a result, there is a lot of interest among investors who want to invest in downstream companies.
Methane and Propane: Alberta has large supplies of methane and propane and presently, the province produces more than the demand in the country. Hence, many Alberta petrochemical companies use these gases for different petrochemical applications. Also, methane and propane gases are being exported to the US and other nations.
Ethane: Four ethane cracking plants are located in Alberta and out of these, two have the distinction of being the largest in the world. Ethane is used in the manufacture of plastics but it is also used to manufacture chemicals using natural gas liquid. According to government estimates, Alberta has more ethane supplies, which can be tapped when the need arises.
The Future of Alberta’s Petrochemical Industry
The global demand for petrochemicals is not waning. On the contrary, it is anticipated that the demand will continue to increase and this will enable the petrochemical industry to thrive and flourish. It will also result in the expansion of this industry as it embraces newer drilling and exploration technologies.
The government hopes to make Alberta one of the top 10 producers of petrochemicals by 2030, and to facilitate this, the government announced a recovery plan to help the industry cope with the fallout of the pandemic. This program, called the Alberta Petrochemicals Incentive Program, is for 10 years to attract billions of dollars through investments in the petrochemical sector.
It is anticipated that the incentive program will create over 90,000 direct and indirect employment opportunities the country will earn over $10 billion from income taxes paid by companies and professionals.
Alberta’s petrochemical industry is an essential sector in the country, and it did not close down even during the COVID-19 pandemic. That goes to show how important this industry is and why it is attracting investors from the world over.