By Josh Hoffman @JoNoHoffman Country 95 @Country95

Province Unveils $500M Worth of Incentives for Petrochemicals Sector

Feb 1, 2016 | 11:13 AM

EDMONTON: The Alberta Government has unveiled a new Petrochemicals Diversification program worth $500M.

The program aims to encourage companies to invest in the development of new petrochemical facilies in the province by providing royalty credits.

Up to $200M worth of credits are available for each potential facility and they will be paid out over three years after the facility begins production.

Alberta Energy’s Al Sanderson says the purpose of the program is to mitigate the high cost of construction locally.

“Our man competitors are down in the Gulf Coast. Their costs of construction are significantly lower than we have here in Alberta.”

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Sanderson believes high construction costs are holding back investment as operation costs are competitive with facilities in places such as Texas and Louisana.

The province sees the potential for $3 – 5 billion worth of capital investments into the Alberta economy. 

​While petrochemical facilities do not directly benefit from royalty credits, as they do not pay royalties, the credits earned by an approved facility can be traded or sold to an oil or natural gas producer.

Up to 3,000 new jobs are expected to be created during construction of a facility and more than 1,000 jobs will be added once its operational. 

The province says there is the potential for two or three facilities to be build in Alberta.