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Pembina Pipeline announces lump sum contract for petrochemical facility in Canada

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Pembina Pipeline, together with Petrochemical Industries of Kuwait, has announced that Canada Kuwait Petroleum (CKPC) has executed a lump sum engineering, procurement and construction (EPC) contract for the construction of a major petrochemical facility in Canada.

The contract has been secured for construction of the propane dehydrogenation (PDH) facility within its integrated PDH and polypropylene (PP) upgrading facility (PDH/PP facility). Through the contract, CKPC has now fixed around 60% of the cost of the PHD/PP facility.

Following execution of the EPC contract, Pembina has additional revised its proportionate share of the capital cost of the PDH/PP facility, including the 100% directly-owned supporting facilities, to $2.7 billion (€2.4 billion).

"When faced with the proposition of trading returns for risk, Pembina has consistently chosen certainty and downside protection, particularly in new platforms or new businesses,” explained Mick Dilger, president and CEO of Pembina. “Our relentless pursuit of a lump sum contract for the PDH facility reflects our disciplined and prudent approach to capital allocation.

"This project is highly strategic for Pembina and our producer customers in the Western Canadian Sedimentary Basin. It offers a new demand source for domestically produced propane and supports ongoing development of Canada's world-class hydrocarbon resources."

Heartland Canada Partners, a joint venture between Fluor Canada and Kiewit Construction Services, has been selected as the EPC contractor for the PDH facility. Contractor selection for the PP facility is ongoing.

The facility is expected to begin commercial operations in the second half of 2023.