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Primus Green Energy Inc. announced Tuesday it plans to develop a 160-tonne-a-day methanol plant in northwestern Alberta.

The Hillsborough, N.J.-based company has signed a memorandum of understanding with an unnamed Alberta partner and intends to start producing methanol at the plant in the first quarter of 2018, the firm said in a news release.

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While modular construction is expected to start off-site in the first three months of 2017, the timing of final installation depends on the location, which hasn’t been decided yet.

Methanol will be created from methane in natural gas.

It will mainly be used by gas producers and processors in the Montney and Duvernay fields for such purposes as helping gas flow in cold weather.

The fields cover such areas as Fox Creek, Valleyview, Grande Prairie, Sexsmith and Dawson Creek, B.C.

Primus has applied to reduce feedstock costs through the province’s Petrochemicals Diversification Program, whichencourages companies to invest in the development of new Alberta petrochemical facilities by providing up to $500 million in incentives through royalty credits.

The royalty credits are an important incentive as the company makes a final investment decision and will affect the plant location decision, the company said.

It did not reveal how much the project will cost.