Alberta to Offer Incentives to Develop Petrochemical Industry

 Alberta will provide financial incentives for companies willing to invest in petrochemical facilities as the Canadian province attempts to counter an oil industry downturn with the expansion of other sectors.

The program will offer incentives worth C$500 million ($357 million) for the construction of plants using methane or propane to maker such products as plastics, detergents and textiles, the government said in an e-mailed statement. Investors in the projects will earn credits that can be used to pay royalties on natural gas production, or sold to producers.

“This program 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,” said Energy Minister Margaret McCuaig-Boyd in the statement.

The program is the latest effort by Alberta’s left-leaning government to revamp policies for the province’s ailing oil and gas industry, including a royalty review announced the last week in January, as well as new limits on carbon emissions and higher corporate taxes introduced last year. The royalty review highlighted opportunities to spur investment in natural gas and liquids helped by a simplified, and in some cases, lower payment structure for producers, Premier Rachel Notley said.

Natural gas has hovered near $2 per million British thermal units in New York for the past four months.

Alberta’s royalty review panel recommended a simplified structure to take into account the fact that producers using hydraulic fracturing technology often produce several fossil fuels concurrently, including oil and natural gas liquids.