Canada will soon see new polyethylene and polypropylene capacity as new plants start up while investors contemplate other downstream projects, said in an interview Bob Masterson, president of the Chemistry Industry Association of Canada (CIAC).

PDH/PP plant near Edmonton, Alberta. Image courtesy of InterPipeline.

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“We expect the value of 2021 shipments to at least return to 2018 levels and perhaps even higher and that would be decade-highs,” he said.

For the first half of 2021 the value of chemical shipments is above 2018 levels and “generally we are seeing very strong growth in nearly all chemical sectors,” he said.

“With the significant increase in lumber prices in 2021 there has also been some substitution effect for additional construction plastics,” he added.

Startups in 2022

“As we look into 2022 we have two major new facilities coming online,” Masterson said.

“NOVA Chemicals Corunna expansion, in the Sarnia area (Ontario) is expected to be online in 2022. The plant will add one billion pounds of annual capacity of polyethylene.

Inter Pipeline’s propane dehydrogenator and polypropylene complex in Alberta remains scheduled for a 2022 startup. It will have 525,000 tonnes of annual production capacity of polypropylene.

“We expect that increased demand along with supply constraints will mean a very tight market,” he said, referring to weather events in the Gulf Cost petrochemical hub.

“That will be an advantage for Canadian chemical producers,” he added.

Recent tailwinds 

The Canadian federal government has reached important agreements with the chemical industry, Masterson said.

“What we were more concerned about was the so-called Clean Fuel Standard,” he said.

“At the start of the year the government of Canada did agree with us that the chemical and other key investment sectors should be exempted from clean fuel standard requirements because they are already covered by the carbon tax,” he said.

“That was a significant improvement in the regulatory landscape,” Masterson added.

“The province of Alberta has over the past year revamped and re-invigorated its chemistry investment program,” he said.

Quebec has a program described as its innovation strategy focused on investment “around hydrogen, electrical vehicles, and you see a number of proposals,” Masterson said.

Some projects

There are plans for construction during this decade of several projects, said Greg Moffatt, the CIAC’s business and economics director. 

Nauticol Energy has a project proposed in Grand Prairie, Alberta that will produce net-zero methanol, he said. Back in 2019 an analyst discussed some issues related to this project still awaiting decisions.

Vopak Pacific Canada has a Prince Rupert, British Columbia-based methanol terminal project for exports.

“We’ve seen Air Products come forward with a C$1.3 billion facility. They are still in the final stages of making an investment decision but it is targeted for 2024,” Moffatt said. The plant would be in Alberta.

The Alberta government has already signaled investment support for that project through the technology innovation and emission reductions fund, he added.

Suncor and ATCO are proposing a hydrogen facility with carbon capture. A decision targeting operations in 2028 is expected, he said.

Shell and Mitsubishi are considering a new hydrogen facility with carbon capture that would come online later this decade, Moffatt said.

Sept. 20 vote

Canada had in 2019 a GDP of $1.7 trillion, just short of $1.8 trillion for Brazil but above $1.3 trillion for Mexico.  The U.S. GDP was $21.4 trillion in that year. Canada has a population of about 38 million, compared with 211 million Brazilians and 128 million Mexicans.

On Sept. 20 Canadians will elect members of the House of Commons to the Canadian Parliament. In the previous federal elections on 2019 the Liberal party, which is led by Prime Minister Justin Trudeau, lost seats to the Conservative party but kept the biggest representation.

Electoral uncertainties may impact the sector in the longer term depending on how climate and plastics policies are implemented, CIAC officials have said in the past.

The federal government in May decided to include plastic items under its so-called Schedule 1 Toxic Substances List.

Canada has announced plans to ban a list of single-use items starting in December. The list includes items like six-pack rings and straws.

By Renzo Pipoli

($0.79 = C$1)