|
Alberta pumps C$408 million into Inter Pipeline petrochem complex
Gary Park for Petroleum News
The Alberta government has dug deep into its piggybank to pull out a C$408 million cash grant for Inter Pipeline’s Heartland Petrochemical Complex, HPC, near Edmonton - the first allocation under the province’s Petrochemicals Incentive Program.
The handout will be paid in three equal instalments over four years, once Heartland comes on stream in 2022, and will cover up to 12% of eligible capital costs.
The complex, which has been wrestling with construction delays and budget overruns, is rated by Inter Pipeline President Christian Bayle as a potential world-class integrated propane dehydrogenation and polypropylene production facility.
He said HPC’s construction has created thousands of technical, manufacturing and construction jobs and has been a “symbol of hope during difficult economic times” for Alberta.
Bayle said HPC is expected to generate hundreds of permanent jobs and substantial tax revenue for the province.
The government’s grant “sends a clear message to the international investment community that future large-scale petrochemical investments are welcome in Alberta,” he said.
Aim of incentive program The Alberta incentive program is aimed at generating investment for the development of petrochemical facilities and taking advantage of a growing global petrochemical sector, utilizing Alberta’s abundant natural gas reserves to diversify its economy.
Dale Nally, Associate Minister of Natural Gas and Electricity, said the Inter Pipeline, IPL, facility will be the first of its kind in North America.
He said HPC has allowed 150 Alberta companies to benefit from construction of the complex, creating 16,000 direct and indirect full-time jobs over four years, C$200 million in tax revenue for provincial and municipal governments and pumped C$3 billion directly into the Alberta economy.
Once HPC starts operations it will offer 1,000 direct and indirect jobs and generate C$50 million a year in annual tax revenues for a wide range of public services and infrastructure.
Although Rachel Notley, leader of the Opposition New Democratic Party, said she supports the HPC project, but questioned why the government was giving up $200 million in royalty credits.
“We shouldn’t be throwing money out the door as though it’s not ours and we need to get as much growth as we can with as little incentive as we can,” said the former premier of Alberta who is now far ahead of the United Conservative Party government of Premier Jason Kenney in polling.
Franco Terrazzano, Alberta director of the Canadian Taxpayers Federation, said the Kenney government deserves credit for lowering its corporate tax rate and making Alberta more competitive, but it was “mind-boggling” to spend so much taxpayer money on HPC.
Some analysts believe it will now be even more difficult for Brookfield Infrastructure Corp. to succeed in its hostile bid to acquire IPL - a deal valued at C$7.1 billion, including a maximum cash payment of C$4.9 billion. Brookfield already holds a 19.65 percent ownership stake in IPL.
The original offer, which is set to expire June 7, is being vigorously opposed by IPL management.
- GARY PARK
| 