Alberta Propane

Alberta Propane Demand on the Rise

by Rachel Storr, Marketing & Promotion Specialist

According to a report released last month by the Canadian National Energy Board (NEB), Alberta’s propane will be in growing demand, peaking to an all-time high by the year 2020. The largest sector responsible for the demand – the Petrochemical industry – has largely been non-existent in the current, Alberta market landscape, with the industrial sector leading the pack with the greatest percentage of the demand.

If the NEB’s calculations are correct, Alberta propane demand could more than double by 2020. However, producer consumption, agriculture, transportation, commercial and residential demand will remain fairly consistent.

Currently, 73% of Alberta’s propane demand of approximately 53,000 barrels per day – which amounts to about 38,000 barrels per day – comes from the industrial sector. But it’s recent proposals from both Williams and Pembina to create propane dehydrogenation (PDH) facilities (which consume propane to create polypropylene – a type of plastic) that could mean a potential increase of as much as 57,000 barrels a day added to current daily amounts.

These proposals come, at least in part, as a result of the Alberta government establishing the Petrochemical Diversification Program, which offers $500 Million in royalty credits to petrochemical facilities that apply through a competitive process.

The final investment decision on the Williams project is expected later this year with Pembina’s decision being made by mid-2017. If both projects remain on schedule, the facilities could be in place and running as early as 2019.

To read more about this report and to find out more about the Petrochemical Diversification Program implemented by the Alberta government in February 2015, visit: https://www.neb-one.gc.ca/nrg/ntgrtd/mrkt/snpsht/2016/04-05dmndprpnlbrt-eng.html