Alberta’s petrochemical industry received bad news in late April when Dow, one of the world’s largest petrochemical companies, announced that it was delaying construction on an immense expansion of its ethane cracker in Fort Saskatchewan, AB, only a little more than a year after sanctioning the project. Although the length of the delay remains uncertain, the slowdown has created unwanted ripples across other projects that were tied to the expansion, especially for companies working to provide a substantial increase in ethane and natural gas supplies that will be required by the project. In today’s RBN blog, we take a closer look at the delay and what it might mean for Alberta’s energy industry.
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It was all smiles and sunshine for Alberta’s petrochemical and energy industry in late November 2023 when Dow announced that it was greenlighting a major expansion of its ethane cracker in Fort Saskatchewan. Dubbed the Path2Zero Project (Figure 1 rendition below) because of its focus on creating net-zero Scope 1 and Scope 2 emissions in the production of polyethylene, the C$8.9 billion (US$6.5 billion) expansion and retrofit of Dow’s existing Fort Saskatchewan complex was touted as a watershed moment for Alberta’s decades-old petrochemical industry. It was also seen as a major step forward in terms of creating a much larger demand outlet for ethane, the most abundant of the NGLs processed from natural gas in a region — Western Canada — where natural gas production and NGLs output has been steadily rising in recent years. After factoring in additional carbon capture and other emissions-abating technologies as part of the expansion, the all-in cost was estimated to be north of C$11 billion (US$8.1 billion) — not a trifle sum for Alberta’s petrochemical industry, already one of the world’s largest in terms of the production of polyethylene and its consumption of ethane.
Figure 1. Dow Chemical Fort Saskatchewan Path2Zero Ethylene Complex. Source: Dow
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