Alberta joins petrochemicals boom with $2B methanol project proposal
CALGARY — Nauticol Energy Ltd., a little-known private company with a star-studded board of directors, announced plans Tuesday for a methanol manufacturing facility in Grande Prairie, Alta., which is in the heart of the province’s most active natural gas basin.
The proposed $2-billion methanol plant could help the province achieve its goal of processing more of its oil and gas resources within its borders in the midst of severe infrastructure bottlenecks.
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Established in 2016, many of Nauticol’s board of directors are well-known in the Calgary oilpatch, including chairman Leo de Bever, who was previously CEO of the Alberta Investment Management Corp., and director Pat Carlson, the founding CEO of Seven Generations Energy Ltd.
If built, the project would be the second methanol plant in Alberta and boost its petrochemicals sector, which has lagged shale gas processing hotspots such as Pennsylvania and Louisiana.
The Calgary-based company is working through the regulatory process and plans to make an investment decision in 2019 on the facility that will convert 300 million cubic feet of gas per day into 3 million metric tonnes of methanol per year.
Methanol, which has seen soaring demand in Asia, is used to make a range of products including foam, plywood subfloors, anti-freeze and windshield washer fluid.
“If I could snap my fingers and build this plant today, it wouldn’t meet one year’s growth in the market,” Nauticol president and CEO Mark Tonner said of the 100-million-tonnes-per-year global methanol market, clocking growth rates of as high as 5 per cent annually.
The facility near Grande Prairie is adjacent to a Canadian National Railway line, which would give the plant a direct line to Prince Rupert Port in British Columbia and access to Asian markets.
Last year, Alberta launched a petrochemicals diversification program to encourage more natural gas petrochemical processing plants in the province with incentives of up to $500 million in royalty credits.
So far, the program has awarded royalty credits to Inter Pipeline Ltd. for a $3.5-billion propane-to-plastics facility under construction north of Edmonton and a similar facility proposed by Pembina Pipeline Corp. Pembina is expected to make a decision on its project this year.
Tonner said Nauticol had applied for the royalty credits under the diversification program but would not say whether the project would proceed without the credits.
“The (final investment decision) will take a number of things into consideration,” Tonner said, including the credits, market prices, tightness in the labour market and financing.
Once off-take agreements for the methanol are signed, Nauticol would be able to find financiers to back the project “without issue”, Tonner said, adding that he expected to make another announcement on financial partners soon.
Nauticol had also announced plans to develop a methanol and urea project in Becancour, Quebec earlier this year.
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