Western Canada’s propane market has been rapidly evolving in the past few years. Rising Canadian demand for propane and direct exports to Asia from British Columbia’s (BC) two export terminals have been jockeying for supremacy with railed propane exports to the U.S. Those exports to Asia and the U.S. will soon be facing another challenge: the pending startup of Inter Pipeline’s Heartland Petrochemical Complex, which will increase propane demand in Western Canada by a hefty 22 Mb/d in the coming weeks. In today’s RBN blog, we look at what it could mean for propane exports to the U.S., which has traditionally depended on an assist from Canadian volumes.
You may have noticed over the years that we at RBN like writing about propane. Whether it be in Canada, the U.S., or overseas, propane continues to be a market — like so many in the energy industry — that is subject to difficult-to-predict changes in supply and demand. That’s what keeps it interesting. However, there is one very predictable shift in the Western Canadian propane market that is about to take shape but is still of great interest, as it may portend a fundamental realignment of the region’s propane balances and how that might affect one of its primary export customers: the U.S.
The nature of the realignment is one of increased demand for propane in Alberta stemming from the pending startup of Calgary, AB-based Inter Pipeline Ltd.’s (IPL) Heartland Petrochemical Complex (HPC), just outside Edmonton (Figure 1). The company said July 5 that it had successfully commissioned the polypropylene (PP) plant at the complex in preparation for the pending third-quarter start of its propane de-hydrogenation (PDH) unit, which provides the raw material for the production of PP from regionally produced propane. Once it's up and running in the weeks ahead, the fully integrated PDH-PP complex will generate a sustained 22 Mb/d increase in propane demand in Western Canada, continuing a trend under which regional propane production is being increasingly diverted to direct export or in-region use (such as by the HPC), and away from rail exports to the U.S. In turn, the complex will be producing 525 Mtpa (thousand metric tonnes per annum) of PP beads for petrochemical use in Western Canada or for export worldwide.
Join Backstage Pass to Read Full Article