The Edmonton, Alberta-based Heartland commodity resins complex, that includes a propane de-hydrogenator (PDH) plant that turns propane gas into propylene and an adjacent polypropylene plant to polymerize that propylene will see stable production rates closer to its annual capacity of 525,000 tonnes before the end of 2023, company officials said in an interview.

Image courtesy of InterPipeline

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Alberto Blanco, account manager at InterPipeline, and Steven Noble, the company´s corporate communications manager, said during a March interview that the company´s PDH unit started up in December 2022 and that the current production rate is varying, but the management expectation is that full rates will be seen later this year.

“We are fine tuning our grade portfolio we want to create and put the best product out there,” Blanco said.

“We have had success in being able to produce prime relatively quickly,” he added.

Back in January a polypropylene market source had told Reuters Events that the complex had started up production and was likely to run at full rates to displace other competition.

Stable rates

 “In the long term we will definitely be very cost competitive when we are running at full capacity,” Alberto Blanco said during a telephone interview to discuss the startup of the complex.

The Heartland complex is both the first large polypropylene asset in that area of Canada, home to rich hydrocarbon reserves. The resin manufacturing plant is also the first venture by InterPipeline, a midstream company, into the downstream gas industry.

“Once everything is fully operational and we are running at our full output capacity” the polypropylene complex, with its economies of scale, will be very price competive, he said.

“At this time we are kind of going up and down,” he added.

Adding more grades

Before rates are increased, it is important to have ability to produce different polypropylene grades to meet existing demand. Polypropylene is one of the most traded petrochemical commodities along with polyethylene and polystyrene.

“We haven’t made all the grades that we wanted to make. We still have grades that we want to make from our portfolio,” Blanco said.

Polypropylene has a wide range of uses, from being the typical material in final products like stadium seats  to a material used for drinking straws, carpets, protective medical clothing or automotive parts. Its two main grades are homo-polymers and co-polymers.

Current work

The complex “is not running at full capacity on a daily basis due to the very nature of starting up a large operation. It is a process that takes time,” Noble said.

As of March 2023, the company is “working with engineering teams, technology providers,” and other stakeholders, he added.

“At times we are running full rates.The plan is to be running consistently in a full rates later this year,” Noble said.

When starting up an operation of that size and complexity, “there is a lot of fine tweaking that is involved,” Blanco said.

Startup timing

In early 2023 demand for resin commodities has seen a slowdown in North America along with concerns with slower economic growth, including weakening of construction activity, industry executives said in recent earnings discussions.

Construction of the complex in which construction was completed last year had started nearly five years earlier. The company had completed the polypropylene plant by mid-2022 but needed to complete the PDH unit to have its own production of feedstock. In the second half of 2022 it used propylene in storage to run the polypropylene plant.

The startup timing of InterPipeline’s PHD unit roughly coincided with the startup of polypropylene production capacity in Louisiana by ExxonMobil that also took place in December, as reported by the company.

The startups of ExxonMobil in Louisiana and of InterPipeline in Alberta, both in December 2022, were the first after the startup of a polypropylene plant by Braskem in Texas in September 2020.

Weak demand relative to 2021

Braskem, based in Brazil and the biggest petrochemical company in Latin America, is also the biggest polypropylene producers in North America.

Back in 2021 Braskem and other North American polypropylene producers enjoyed very large profit margins amid strong polypropylene demand.

“Demand as a whole is not kind of where we want it to be,” Blanco said.

“Demand tracks with the GDP and we are a little bit below that right now but  for the long term we expect that to be fairly true,” Noble said.

Edmonton is within an 11-hour drive from Montana, the closest U.S. city. This compares with about a 38-hour drive to Montreal, in Eastern Canada.

“We have exported to the U.S., overseas as well,” Blanco said.

“A big portion of the busiess is in Eastern Canada, Montreal, Toronto area. We are building a product portfolio,” Noble said.

The recyclability potential for polypropylene and the multiple uses of the product make the resin the second most demanded plastic resin commodity in the world and management is confident on demand, Noble said.

By Renzo Pipoli