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Part of Development

Alberta Petrochemicals Incentive Program

Grants to attract investment in Alberta’s petrochemicals sector.

Overview

The Alberta Petrochemicals Incentive Program (APIP) is a key part of Alberta’s Recovery Plan and the Natural Gas Vision and Strategy to turn the province into a top global producer of petrochemicals. It provides grants to companies to attract investment in new or expanded market-driven petrochemical facilities.

Key features

The Alberta Petrochemicals Incentive Program will enhance certainty and flexibility for investors and cut red tape to attract investment into Alberta’s petrochemicals sector. Alberta has a tremendous opportunity to capitalize on the growing global petrochemical sector and diversify the province's economy, with our abundant natural gas reserves and a competitive, investor-friendly business environment.

The Program Guideline provides companies considering investment in the sector with detailed information about the program.

Key features of the program include:

  • A 5 or 10-year program period, depending on the scope of the project, during which eligible projects must be built and operational to receive funding.
  • An open and transparent approach, whereby every project submitted that meets the program’s criteria will receive funding once built and operational.
  • Grants worth 12% of a project’s eligible capital costs will be issued to companies after projects are operational. Grants allow companies to account for the full value of the incentive provided when calculating their project’s return on investment.
  • Better alignment with typical investment cycles by making funding available throughout the program’s duration.

Eligibility

The full eligibility criteria are available in the Program Guideline document. Applicants should always refer to the Program Guideline when making decisions on a project or seeking information on the program.

Project eligibility

Eligible projects must meet these criteria, as well as those outlined in the Program Guideline:

  • The project must be physically located in Alberta.
  • The capital investment must be at least (CAD) $50 million.
  • The facility must use natural gas, natural gas liquids, or petrochemical intermediaries such as ethylene, propylene, benzene etc. in the manufacturing of its own products.
  • The project must create permanent jobs in Alberta.

Both new facilities, as well as brownfields and expansions on existing facilities, will be eligible for the program.

Eligible costs

Not all capital costs associated with a project are eligible for reimbursement as part of the grant process. Costs eligible for reimbursement under APIP are related to manufacturing and processing capital expenditures.

Applicants should refer to the Program Guideline to determine which costs will be eligible.

Application and process

Companies can apply to the program through the Electronic Transfer System (ETS). Companies will first have to register for an APIP account through the ETS. Follow the Registration Guide to help complete your registration.

The application and grant process is broken down into three stages:

  • Stage 1: Advance Notification
  • Stage 2: Qualification and Grant Agreement
  • Stage 3: Payment

Currently only the first stage, Advance Notification, is open for applicants on the ETS. Stage 2 will be opened shortly, once project applicants have been invited from the program to apply for the qualification stage.

Stage 1: Advance notification

The advance notification stage allows interested companies to learn if their project will be eligible for the program, and to determine a high level estimate of how much grant funding they may be eligible to receive.

Companies will be asked to provide the following, in addition to other information:

  • Company information
  • Project location
  • Project type
  • Estimates for total costs, eligible capital costs, and job creation

Stage 2: Qualification and grant agreement

At this stage, businesses will be required to provide more information about the proposed project, including:

  • Business Plan
  • Project Timing
  • Technology Configuration
  • Proponent’s Capability
  • Economic Benefits to Alberta, and
  • Environmental Performance

In addition, a minimum of a Class 3 capital cost estimate will be required. This estimate will be used to calculate the amount of the grant. If the project is deemed eligible, the Government of Alberta will then enter into a grant agreement with the company.

If the project’s capital costs calculated in Stage 2 increase as the project goes through construction, the size of the grant will not be increased. However, if the project comes in under budget, the size of the grant will be decreased proportionally to the lower cost.

Stage 3: Payment and Reporting

The payment schedule will depend on the size of the project. Smaller projects (with total capital investments between CAD $50 to $150 million), must be completed and operational within five years of the opening of applications (October 30, 2020). These smaller projects will receive their grant funds within one year of the project’s completion.

Larger projects (with total capital investments greater than $150 million), must be completed and operational within ten years of the application opening. These projects will receive grant payments in equal instalments over 3 years.

The criteria for when a project is considered complete and operational is outlined in the Program Guidelines. Refer to the Reporting Guidelines for instructions on report submissions and payment requests using the Electronic Transfer System (ETS).

Petrochemical Diversification Program (PDP) applicants

Projects that were approved to receive royalty credits under the first and second rounds of PDP (the last closed in October 2018) had 6 months after the launch of APIP on November 1, 2020, to select which program they would like to proceed under. See the guideline for more information on participation under APIP.

Projects not approved under the PDP may also apply for APIP. All APIP projects follow the rules governing APIP, including the determination of the total grant amount.

More information

Alberta is already home to Canada’s largest hydrocarbon processing region, with established and potential petrochemical manufacturing centres in Alberta’s Industrial Heartland Grande Prairie, Joffre and Medicine Hat.

The Alberta Industrial Heartland Association estimates that Alberta has the potential to grow the sector by $30 billion in the next ten years, resulting in more than 90,000 direct and indirect jobs over that period.

Previous petrochemical programs included;

  • The Partial Upgrading and the Petrochemical Infrastructure programs (discontinued in October 2019). These programs relied on grants and loan guarantees to support facilities that would upgrade oil and gas resources.
  • The PDP provided royalty credits to companies in exchange for building facilities that turn ethane, methane and propane feedstocks into products such as plastics, fabrics and fertilizers. The applications for round 2 closed on October 1, 2018.
  • The Incremental Ethane Extraction Program (IEEP) (2006 to 2016) under the Incremental Ethane Extraction Regulation (repealed November 30, 2022) provided credits to petrochemical companies for investment in facilities that reduced greenhouse gas emissions by extracting ethane from the refinery process off-gases. The ethane was upgraded to higher-value petrochemical products such as ethylene and derivatives. The program guidelines and ethane facilities maps are still available. Prior to IEEP, an Ethane Extraction Program was developed in the 80s.

Funded projects

Alberta has provided funding for 3 projects.

News

Contact

Connect with the Natural Gas Strategy and Engagement Branch:

Hours: 8:15 am to 4:30 pm (open Monday to Friday, closed statutory holidays)
Email: [email protected]

Mailing Address:

Alberta Energy and Minerals
Natural Gas Strategy and Engagement Branch
6th Floor, North Petroleum Plaza
9945 108 Street NW
Edmonton, Alberta  T5K 2G6