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Alberta announces grant-based Petrochemical Incentive Program

July 10/2020

MOSCOW (MRC) -- The Province of Alberta, Canada, today announced the Alberta Petrochemicals Incentive Program (PIP), a 10-year, grant-based initiative to attract petrochemical investment, said Chemweek.

Details are still being worked out, and the official launch is scheduled for fall. The new program is significantly different from the Petrochemical Diversification Program, which invited project proposals to compete for feedstock royalty credits. Instead, every project that meets the PIPs criteria will receive funding if built and operational within 10 years.

"Compared to previous government petrochemical programs, the Alberta Petrochemicals Incentive Program will cut red tape and increase certainty and flexibility for investors, attracting more financial investment into Albertas petrochemicals sector," says a government statement.

Grants allow companies to better account for the full value of the incentive when calculating a projects return on investment, the statement notes. Additionally, the grants will not be subject to a private evaluation by the government, and the 10-year window will allow projects to align with typical business investment cycles.

As MRC informed before, global oil consumption cut by up to a third in Q1 2020. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

We remind that in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.


mrcplast.com
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, petrochemistry.
Category:General News
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