Fluor, Kiewit win multibillion-dollar contract to build new petrochemical facility outside Edmonton
January 8, 2020 by On-Site Staff
The Canadian and Kuwaiti companies developing a new multibillion-dollar petrochemical facility in Alberta have awarded a lump sum construction contract to a 50/50 partnership between Fluor Canada Ltd. and Kiewit Construction Services ULC.
Calgary-based Pembina Pipeline Corp. and Petrochemical Industries Co. K.S.C. of Kuwait have been planning the facility within the Alberta Industrial Heartland development area northeast of Edmonton for nearly four years. The group announced a positive investment decision for the integrated propane dehydrogenation plant and polypropylene upgrading facility last February and has been working to secure contractors to take on the project since.
The precise value of the new lump sum contract with Fluor and Kiewit was not disclosed, but Pembina said it covers approximately 60 per cent of the capital costs of the project, which is now estimated at $4.9 billion, up from $4.5 billion earlier this year.
“Our relentless pursuit of a lump sum contract for the PDH facility reflects our disciplined and prudent approach to capital allocation,” Mick Dilger, the company’s president and CEO, said in a release. “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.”
The deal with Fluor and Kiewit covers construction of the site’s propane dehydrogenation facility. Canada Kuwait Petrochemical Corp. said the contractor selection process for the polypropylene upgrading facility is still ongoing.
Once in service, the petrochemical site, which will be located just north of Fort Saskatchewan, Alta., will produce about 550,000 tonnes of polypropylene per year using propane currently exported from Alberta. A common type of plastic, polypropylene is used in a wide range of manufacturing applications.
Fluor said Jan. 9 that engineering work for the facility is already underway, while construction is scheduled to start in late 2020. The plant is expected to open by mid-2023.
—With a file from The Canadian Press