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Petrochemical Industries CEO Mohammed Abdullatif Al-Farhoud added in the same release that the facility is “ideally aligned with PIC’s continued pursuit of sustainable and globally diversified growth.”

Pembina was awarded $300 million in royalty credits in 2016 as an Alberta government incentive for the project.

At the same time, Calgary-based Inter Pipeline Ltd. got $200 million in credits for its nearby $3.5-billion polypropylene project, which is now under construction.

The credits allow producers to reduce their royalty payments to the government and, as such, can’t be claimed by the petrochemical plants themselves.

However, Pembina said Monday it has made agreements with producers to “monetize” 80 per cent of the credits over the first several years of operation of the facility, which is expected to be in-service in mid-2023.

Pembina’s share of the project’s capital costs will be $2.5 billion including a 50 per cent interest in the joint venture, which will own the plants, and a 100 per cent stake in the supporting facilities.

The plants will be located next to Pembina’s Redwater fractionation complex, which extracts liquids such as propane, ethane and condensate from natural gas.

They will consume about 23,000 barrels per day of propane and have nameplate capacity of 550,000 tonnes of polypropylene per year.

The project is part of a resurgence in spending on industrial chemical industry projects in Canada. A recent members survey by the Chemistry Industry Association of Canada projected capital spending would jump by 65 per cent to $1.9 billion this year, the highest since $2.2 billion in 2014 and third-highest in a decade.