As B.C. and AlbertaB次元官网网址檚 natural gas industry reaches out to international markets through LNG exports from the North Coast, a related petrochemical business is aiming for the fast-growing Asia market.
Calgary-based West Coast Olefins Ltd. has applied to for an ethylene plant to operate on industrial land at Prince George. The $5.6 billion project would share the site with a partner to convert ethylene into polyethylene pellets for export to Asia. Its feedstock is natural gas liquids produced from the Montney shale that extends from northeast B.C. into northwest Alberta.
West Coast CEO Ken James says the site is the best production point in North America because of its access to a long-established gas pipeline that serves Metro Vancouver, a long frontage on the CN Rail line to the main export outlet, the Port of Prince Rupert, and shore access to the Fraser River. The operation needs up to 1,000 employees in a region where the forest industry is in a deep slump.
During a business trip to Victoria, James spoke with Black Press reporter Tom Fletcher about the project:
TF: What makes B.C.B次元官网网址檚 Northern Interior a good place for this project?
KJ: One of the primary drivers was I wanted an existing pipeline and not needing a new one. WeB次元官网网址檝e seen projects fail on needing a new pipeline, and we avoided that.
TF: Have there been other projects like this proposed?
KJ: There are none in Prince George, but there is an existing natural gas line that runs all the way down past Prince George to Vancouver. NobodyB次元官网网址檚 been taking the liquids out. YouB次元官网网址檝e got an existing line with liquids in it, and as the price of gas has gone down, the producers are focused on the liquid-rich gas, so the content is actually going up.
TF: ThatB次元官网网址檚 the Montney shale that extends from northeast B.C. into Alberta.
KJ: Yes. The Horn River shale [farther north] is dry gas, so nobodyB次元官网网址檚 developing it. The MontneyB次元官网网址檚 liquid-rich, so everybodyB次元官网网址檚 developing that.
West Coast Olefins CEO Ken James describes his $5B proposed plant in B.C.
B次元官网网址� Tom Fletcher (@tomfletcherbc)
TF: Is this related to the LNG projects that weB次元官网网址檙e seeing come forward?
KJ: No, itB次元官网网址檚 using the existing gas line thatB次元官网网址檚 been operational for 60 years. WeB次元官网网址檙e not doing new production, weB次元官网网址檙e taking more value out of existing production.
TF: ThereB次元官网网址檚 a light oil refinery in Prince George. [Husky Energy the small low-sulphur diesel and gasoline producer to Tidewater Midstream for $215 million.] Is that related to your project? Do they compete with you?
KJ: WeB次元官网网址檙e going to have about 20 per cent condensate that weB次元官网网址檒l extract from the pipeline. WeB次元官网网址檒l be complementary. IB次元官网网址檝e already met with them, and their CEO actually invested in my last company.
TF: What was your last company?
KJ: , a methanol project in Grand Prairie, Alberta thatB次元官网网址檚 in development right now. It has some financial support from the Alberta government.
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TF: With West Coast Olefins, thereB次元官网网址檚 an issue with Enbridge, which runs the pipeline youB次元官网网址檙e proposing to use. Can you explain that?
KJ: TheyB次元官网网址檙e proposing to do an equivalent straddle plant to take the liquids out at Chetwynd. They would use a 150 km pipeline and taking it back to Taylor, where they have liquids lines that would take it back to Fort Saskatchewan [site of AlbertaB次元官网网址檚 new Sturgeon refinery]. That would kill our project.
TF: What would West Coast Olefins produce?
KJ: WeB次元官网网址檙e going to make ethane into ethylene. There is an opportunity to turn the propane to propylene as well. TheyB次元官网网址檙e made into polyethylene and polypropylene. We are going to have a third party that will take that step, in Prince George. The marketB次元官网网址檚 going to be Asia, not the U.S., so would you rather have it in Prince George or Edmonton?
TF: You have acquired a 300-acre site?
KJ: Yes. ItB次元官网网址檚 already industrial land, beside the B.C. Industrial Park. ItB次元官网网址檚 fee-simple land, which makes it a lot less complex, rather than touching Crown land. WeB次元官网网址檝e got about a mile of frontage along the CN main line, and our property goes right up to the Fraser River. We have the Fraser, the rail, the road, a population of 80,000 people, and the Enbridge pipeline runs 10 km from our site.
TF: And they have a competing project.
KJ: Yes. Their application is also in the B.C. Environmental Assessment Office. The Enbridge pipeline is a nationally regulated pipeline, because it crosses the border into Washington, Oregon etc. When an owner of a nationally regulated pipeline proposes a project on that, they automatically force their project into the national regulatory process, so their application is in the wrong regulatory body. That wouldnB次元官网网址檛 apply to us, because we donB次元官网网址檛 own the pipeline.
tfletcher@blackpress.ca
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