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CALGARY – In a boost to Alberta’s beleaguered energy industry, Inter Pipeline Ltd. said it will spend $3.5-billion on Canada’s first-ever propane-to-plastics petrochemical plant.

The announcement that a major new energy project will be built is welcome news in Alberta, which has seen a raft of pipelines and natural gas export plants delayed or cancelled, amid a three-year long downturn in oil prices.

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Starting next month, Inter Pipeline will spend the next four years building a propane dehydrogenation and polypropylene (PDH-PP) facility, which will take 22,000 barrels of propane per day and convert it into 525,000 tonnes per year of “polymer grade” plastic pellets. The pellets are used to build every day consumer plastic products such as bottles and toys.

“This is a whole new value chain for Canada,” company senior vice-president David Chappell said Monday, adding that there are currently no petrochemical plants in Canada that use propane as a feedstock.