$5.6 Billion West Coast Olefins Ltd. petrochemical complex in Prince George, B.C. begins regulatory approval process

Petrochemical complex in Prince George, B.C. begins regulatory approval process by Grant Cameron, October 14, 2019, Journal of Commerce

Construction of a $5.6-billion petrochemical complex in Prince George, B.C., could begin as early as 2021 if all goes according to plan, says Ken James, president and CEO of Calgary-based West Coast Olefins Ltd.

The company has secured a 120-hectare site in the BCR Industrial Area at the southeast end of the city and is now entering the regulatory approval process which would require an environmental assessment.

“It’s going to be a big employer and the timing is important because there’s been a lot of shutdowns of pulp mills and sawmills in the area,” says James. “We just need to start training people for the work.”

The project would include a world-scale ethylene plant and polyethylene facility. Liquids, such as ethane, propane and butane, would be extracted from an existing liquid natural gas pipeline that runs past the city and the by-products would then be used to make materials like plastic and rubber for Asia.

James says a final investment decision is to be made by the end of next year and, if approved, the project would be built over a three-year period with start-up at the end of 2023.

Between on-site construction labour and use of manpower at local fabrication shops, he figures construction of the complex will employ thousands of skilled trades and construction workers over a three-year building period. Another 800 to 1,000 permanent jobs would be created once the plant is operational.

According to the company, the overall project would include an LNG recovery plant to recover ethane, propane, butane and natural gas condensate from Enbridge’s west coast natural gas pipeline, an ethylene plant to produce polymer-grade ethylene, a polyethylene plant to consume most of the ethylene produced, and other infrastructure. A mono-ethylene glycol plant may also be built on the site.

“It’s going to be a process plant so a lot of it will be outdoor equipment like distillation columns and pressure vessels,” says James. “There will be buildings for compressor houses, chemical buildings, offices and electrical controls and things like that.”

Polyethylene, which is essentially plastic in pellet form, would be shipped to China and Indonesia, along with propane and butane and possibly mono-ethylene glycol, which is used as antifreeze and heat transfer fluid.

James says Prince George was chosen as the preferred location for the complex because natural gas is now being exported mostly to Asia, rather than Ontario and the U.S., so the company is going with the flow.

“Most people think it’s interesting because we’re trying to do a petrochemical project in British Columbia.”

But, he notes, Prince George already has a lot of the pieces in place for such a venture, namely a pipeline, waterways, a connected rail system, designated industrial land and sizeable population base.

“I wanted a project where I didn’t need to build any pipeline for very obvious reasons,” says James. “I also wanted a community that was big enough to do this without total disruption and Prince George has that.”

Actual construction of the complex will have its challenges, though, he says, as components will have to be manufactured on or near the complex instead of being shipped in from other parts of Canada or Asia.

“LNG Canada is on the coast so they can actually have modules built in China and Indonesia and have them shipped across the ocean. However, there’s a big mountain range which is the Coastal Range and I can not bring modules into Prince George. To the east, I have the Rocky Mountains, another significant barrier to bringing in stuff from Alberta module shops, so I have to do my construction in Prince George.”

Another challenge is that most of the industry in Prince George has been geared to the sawmill and pulp industries and, because the project will need fabrication of big pressure vessels and pressure piping, a lot of effort will have to be put into converting local industry to focus on petrochemicals and fabricating.

Instead of investing in the project, James, who has worked on several ethylene plants, says he has asked the province to put money into fabrication and construction infrastructure in Prince George, as those skills will be needed for the venture and he is relying on the local workforce to build the project.

For the past year, company representatives have been meeting with local contractors to get a handle on the labour situation and fabrication infrastructure. They’ve also had meetings with local and First Nations leaders, as the project will be constructed within the territory of the Lheidli T’enneh First Nation.

Chief Clay Pountney said in a statement that, “Lheidli T’enneh Nation looks forward to potentially partnering with West Coast Olefins to ensure that if the project is approved (it) will provide significant economic benefits to Lheidli T’enneh and our members and is designed and built in a way that is aligned with our values.”

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