Alberta’s refining and petrochemical cluster is characterized by modern, world-scale plants with access to abundant resource feedstock and efficient transportation systems.
Located in the heart of the Western Canada Sedimentary Basin, the province is home to vast deposits of natural gas. Basins located throughout the province provide an abundance of competitively priced natural gas to Alberta’s petrochemical manufacturers.
Alberta’s petrochemical sector is a major producer of methane, ethane, ethylene and propane, and is becoming a leader in low-carbon hydrogen and methanol production.
Low-cost and abundant feedstock
Alberta has immense natural gas reserves and has over 200 years of natural gas supply at current production. Alberta’s natural gas is cost competitive across North America, and trades at a discount compared to American suppliers, providing an affordable and reliable feedstock for petrochemical plants.
The province also has abundant supply of propane gas to develop new petrochemicals products. Western Canada currently produces around 160 bcf/d of natural gas and 160 kbbl/d of propane — well beyond our domestic demand. Alberta has a deep reserve of propane and over 100 years of supply at current production. The province’s propane feedstocks are cost competitive compared to global markets.
Natural Gas Production by Province
Natural Gas Price Forecast
Alberta is also a significant supplier of ethane as a petrochemical feedstock to manufacture plastics and other industrial and consumer materials. Alberta’s four ethane-cracking plants have a capacity of 4.1 million tonnes per year accounting for almost 80% of Canada’s total installed ethylene-producing capacity. The ethane price in Western Canada is currently among the lowest in the world at $250/tonne.
The Canadian Energy Research Institute (CERI) found that Alberta’s petrochemical projects are economically competitive with new facilities in four global hubs, including the U.S. Gulf Coast, mainly due to its vast supplies natural gas and liquids including ethane, propane and butane.
Canada’s Ethane Potential
Robust, growing infrastructure
Alberta has one of the largest natural gas infrastructure networks in North America. TC Energy’s NGTL network is the primary gas delivery system in Alberta — connecting the Western Canadian Sedimentary Basin to domestic and export markets through 33,000 kilometres of pipeline. The company is currently investing $9.9 billion into the network to add 3.5Bcf/d of delivery capacity between 2020 to 2024. This will significantly expand the capacity of the network to deliver natural gas throughout Alberta.
Petrochemical projects in Alberta also have access to the province’s large amount of storage and processing capacity. The province has more than half of Canada’s natural gas storage inventory, which balances the supply and reduces market volatility.
The province is home to the largest petrochemical manufacturing centre in Canada. Alberta’s Industrial Heartland counts 40 industrial sites, 7,000 employees, and $40 billion in investment. It is designed to advantage of its proximity to Alberta’s oil sands and existing transportation networks.
Access to international markets
Alberta is already home to a well-established petrochemical industry. With 36 chemical and petrochemical manufacturers operating throughout the province, Alberta has developed the expertise and regulatory framework to support a thriving petrochemical sector.
Alberta has the most engineers per capita in Canada with a large labour pool specializing in petroleum and chemical engineering. R&D in Canada is very cost effective, as salary costs for this highly skilled labour are lower than in other industrialized countries.
With the petrochemical industry clustering around central Alberta, it’s not hard to find talent within these communities.
Alberta’s clear regulatory framework strengthens its competitiveness. The Government of Alberta and Invest Alberta offer a regulatory roadmap and support to help navigate investments into the sector. Alberta’s Department of Energy and Department of Environment and Parks have in-house expertise to ensure accurate assessment of projects.
Well-established petrochemical industry
With a strategic position serving major American and Canadian markets, Alberta offers efficient transportation systems able to deliver supply to consumers. Alberta is home to two transcontinental rail carriers with intermodal terminals. Canadian Pacific and Canadian National Railway operate approximately 7,000 route miles in Alberta.
Alberta’s extensive rail network not only allows market access across North America, but also Asian markets. The Port of Vancouver and Port of Prince Rupert, two of Canada’s largest ports, offer regular depatures to major Asian markets including China, Japan, South Korea and India.
Room for growth
Alberta’s midstream natural gas infrastructure has the capacity to accommodate significant new petrochemical projects.
Through its Natural Gas Vision and Strategy, adopted in 2020, Alberta plans to increase its processing and transportation capabilities to become a global top 10 producer of petrochemical products.
According to Alberta’s Industrial Heartland Association, there is an opportunity to grow Alberta’s petrochemical sector by more than $30 billion by 2030.
Business-friendly policies and government incentives
The government supports the long-term growth of Alberta’s petrochemical industry by creating the best possible policy environment, cutting red tape and facilitating approvals.
Government incentive programs, such as the Alberta Petrochemical Incentive Program (APIP), make Alberta an attractive place to build new petrochemical plants. Launched in fall 2020, APIP covers up to 12% of eligible capital costs once a plant is up and running.
Not to mention, Alberta is one of the most cost competitive jurisdictions in North America, with the lowest corporate income tax (8%) in Canada.
New fuels and innovation
A pioneer in carbon capture, use and storage (CCUS), Alberta is leveraging its expertise and existing CCUS facilities and infrastructure to expand into low-carbon petrochemical products, such as blue methanol and blue hydrogen.
Alberta is home to two of the world’s 18 large-scale projects. The newest, the Alberta Carbon Trunk Line, can sequester 14.6 million tonnes of CO2 per year. The captured carbon is used to produce blue hydrogen and for enhanced oil recovery.
Edmonton Region Hydrogen Futures
areas of focus
CO2 capture, aggregation, and sequestration
Hydrogen transfer, hydrogen fuel cells, hydrogen production
Blue methanol production
Alberta is leveraging its expertise in cleantech and leadership in carbon capture, use and storage (CCUS) to produce new low-carbon petrochemical products.
Abundant natural gas and feedstock
Natural gas and natural gas liquids fractionation
Propylene and polypropylene
Ethylene and polyethylene
Methane and methanol
Alberta’s abundant supplies of natural gas provide petrochemical plants with low-cost feedstocks to develop a range of products.
World-class value-added processing
Extensive natural gas delivery system
Propylene derivatives plants
Ethane cracking complexes
Alberta has modern, world-scale plants and the largest natural gas infrastructure networks in North America.
Access to markets
CP and CN: transcontinental rail carriers with intermodal terminals
Rail access to Canada’s two largest ports
Alberta’s efficient transportation systems allow access to North American and Asian markets.
Alberta’s competitive advantage comes from its low tax rates, lucrative incentives and business friendly policies
Low corporate tax burden
Alberta’s corporate tax rate has dropped to 8% — the lowest in the country and competitive across North America
Alberta Petrochemicals Incentive Program
Provides grants worth up to 12% of eligible capital costs once operational
Stable fiscal and regulatory environment
Canada scores in the top 30 of the World Bank’s Political Stability Index (2019)
Lowest Tax Rate in Canada
Alberta is a leader in environmental protection — implementing policies that enable industrial sectors to reduce emissions, while making investments in innovative technologies
Carbon capture and storage pioneer
Home to the world’s first commercial-scale oil sands CCUS facility (Quest, 2015)
Sustainable by design
NWR Sturgeon Refinery is the world’s only refinery designed from the ground up to minimize its environmental footprint
A pioneer in blue methanol
Nauticol will be the first company to produce net-zero blue methanol at a world scale
Major carbon capture potential
Alberta Carbon Trunk Line is the world’s largest CO2 pipeline — sequestering 14.6 million tonnes of CO2 per year
Leader in low-carbon hydrogen
World’s largest net-zero hydrogen energy complex being built in Alberta’s Industrial Heartland
Investing in emissions reduction
$449M in stimulus funding over four years through Tech Innovation Emissions Reduction (TIER) program to reduce emissions
Talent and productivity
Alberta is home to a young, diverse and highly educated workforce, with expertise in the petrochemicals sector
High concentration of engineers
Alberta is home to the most engineers per capita (Engineers Canada, 2018)
Highly educated population
56% Albertans have post-secondary education
Globally ranked post-secondaries
Alberta’s globally ranked post-secondary institutions have expertise in engineering, mining, petroleum production
Home to the country’s leading polytechnic
Northern Alberta Institute of Technology (NAIT) is the largest technology and apprenticeship trainer in Canada
Fastest growing population
Greatest population increase in North America (18.5% from 2010-2020)
Highest proportion of workers under age 45 in Canada (53.3%)
Alberta Industrial Heartland
Located north of Edmonton, Alberta’s Industrial Heartland is Canada’s largest petrochemical processing region, responsible for 43% of Canada’s basic chemical manufacturing industry. Over 40 energy and petrochemical companies operate in the region, fostering a multi-sectoral industrial cluster with the talent and infrastructure to support large-scale petrochemical investment.Learn more
Central Alberta and Joffre
With a strategic position between Alberta’s two largest cities, Joffre is a growing petrochemical hub. It is home to Nova Chemicals, which operates the world’s largest ethylene and polyethylene production facilities.Learn more
Located in southeast Alberta, Medicine Hat is home to an established petrochemical industry. With a population centre over 60,000, Medicine Hat offers a skilled a labour pool with industrial expertise. The region’s current petrochemical capacity includes methanol and nitrogen fertilizers.Learn more
An emerging petrochemical hub, Grand Prairie is centrally positioned within Alberta and northern BC’s oil and gas sector. Located in the Montney formation, which is projected to produce over half of Canada’s natural gas by 2040, Grande Prairie is one of province’s largest producer of natural gas and home to a skilled workforce.Learn more
A petrochemical hub with close rail access to the west coast and critical ports for shipping to Asian markets. The local towns of Edson and Hinton offer an experienced labour pool with skillsets in oil and gas.Learn more
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Alberta’s petrochemical sector is growing and diversifying
Alberta is home to many established petrochemical and energy companies and some innovative players. Our petrochemical sector is expanding its products and leading the push toward a low carbon future.