Growing Alberta’s petrochemical industry
Whether its low-carbon hydrogen or conventional chemical products, Alberta’s established petrochemical industry has the capacity to grow and diversify
Alberta is home to the country’s largest refining and petrochemical manufacturing cluster in Canada and produces 70% of the country’s natural gas.
Alberta’s well-established petrochemical industry capitalizes on low-cost feedstocks and an efficient transportation system to meet the growing global demand for petrochemical products.
Coupled with lucrative incentives and increased market access, the province’s expertise and competitive business environment have given the industry momentum.
Innovators are leveraging the province’s leadership in carbon capture, use and storage (CCUS) to create low-carbon products and position Alberta as a global supplier of clean, responsibly sourced petrochemical products.
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 produces 70% of Canadian natural gas
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.
$7.2 billion in petrochemical projects are planned, underway, or have recently been completed in Alberta
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.
The emerging global hydrogen industry could be worth US$2.5 trillion per year by 2050
Alberta is working hard to create a sustainable, low carbon future for the world through environmental stewardship, positive social change and global governance leadership
areas of focus
Cleantech
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CO2 capture, aggregation, and sequestration
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Hydrogen transfer, hydrogen fuel cells, hydrogen production
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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
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Natural gas and natural gas liquids fractionation
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Propylene and polypropylene
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Ethylene and polyethylene
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Methane and methanol
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Ethanol Amines
Alberta’s abundant supplies of natural gas provide petrochemical plants with low-cost feedstocks to develop a range of products.
Infrastructure
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World-class value-added processing
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Extensive natural gas delivery system
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Propylene derivatives plants
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Ethane cracking complexes
Alberta has modern, world-scale plants and the largest natural gas infrastructure networks in North America.
Access to markets
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CP and CN: transcontinental rail carriers with intermodal terminals
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Rail access to Canada’s two largest ports
Alberta’s efficient transportation systems allow access to North American and Asian markets.
Tax advantage
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
ESG
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)
Young workforce
Highest proportion of workers under age 45 in Canada (53.3%)
Main regions
Alberta has an established petrochemical industry that centres around its various natural gas reserves. These areas benefit from a talented workforce, strong infrastructure and access to North American and international markets.
Alberta Stories
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Read MoreAlberta’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.
