Alberta boosts gas use for petrochemicals

Alberta will award “royalty credits” to petrochemical manufacturers in a competitive application system designed to add value to natural gas produced in the province.

Alberta will award “royalty credits” to petrochemical manufacturers in a competitive application system designed to add value to natural gas produced in the province.

Credits earned by approved facilities under the $500 million (Can.) program can be traded or sold to oil or gas producers, which can use them to lower royalty payments.

Minister of Energy Margaret McCuaig-Boyd said the system “builds on the royalty review panel’s recommendation for a value-added natural gas strategy to support further upgrading and production of higher-value energy products in Alberta.”

The panel recently reported recommendations emphasizing cost-reduction rather than rate hikes (OGJ Online, Feb. 1, 2016).

In a statement, the government said it expects the petrochemical incentives “to support the construction of several petrochemical facilities that use methane or propane to produce the materials for products that include plastics, detergents, and textiles.”

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