Williams building plant to convert oil sands propane into plastics feedstock
BY ROD WALTON World Staff Writer
Monday, March 18, 2013
Williams Cos. Inc. will build a Canadian processing plant to convert oil sands propane into polymer-grade propylene for use in plastics manufacturing, the Tulsa-based energy firm announced Monday.
The price tag of the Alberta, Canada propane dehydrogenation facility was estimated at $900 million in Canadian dollars, or about $881 million U.S. dollars at current exchange rates. Williams touted itself as the only company in Canada producing polymer-grade propylene.
“We’re thrilled to be moving full-speed ahead on Canada’s first and only PDH facility,” David Chappell, president of Williams Energy Canada, said in a statement. “Once operational, this new propane dehydrogenation facility will expand market opportunities for Canada, feed the demands of North America’s growing petrochemical industry and allow for creation of a new value chain in Alberta.”
Williams extracts a mixture of natural gas, natural gas liquids and olefins from offgas produced when the Canadian tar sands bitumen is converted into usable oil. The Tulsa firm’s Fort McMurray plant extracts those mixes, returns the natural gas to the producers and transports the remaining NGL and olefins mixture by pipeline to Williams’ Redwater fractionation plant.
The propane dehydrogenation plant initially could produce up to 1.1 billion pounds in polymer-grade propylene per year with capabilities to eventually double that output. Williams plans to fund construction out of expected cash flow from its Canadian operation and international cash on hand.
The new plant, pending regulatory approvals, could go into service by 2016’s second quarter.