March 18 (Bloomberg) -- Williams Cos., the third-largest U.S. pipeline company, plans to spend as much as C$900 million ($880 million) building a propane plant in Alberta and is in talks with plastics makers who may build a factory in the province.
Williams’ propane dehydrogenation plant will be the first in Canada and produce as much as 1.1 billion pounds a year of polymer-grade propylene, the Tulsa, Oklahoma-based company said in a statement today. The factory is scheduled to begin operating in the second quarter of 2016, it said.
Williams is talking with plastics manufacturers who may take the entire propylene supply, said David Chappell, head of the company’s Canadian operations.
“We are talking to these global polypropylene producers about siting in Alberta and they’re very interested in building something here to turn it into plastic pellets,” he said in a phone interview today. Chappell declined to identify the companies, which he said don’t yet operate in North America. A plastics plant may cost C$500 million to C$800 million, he said.
Williams is the only processor of gas produced as a byproduct from Alberta’s oil sands. The propylene from its planned plant may also be shipped by rail to the U.S. Gulf Coast for use by petrochemical companies, Chappell said. Propylene sells for 4.5 times the price of propane from Alberta, he said.
Polypropylene pellets are used to make food packaging and auto parts including car bumpers and dashboards.
Williams currently produces 280 million pounds of propylene a year in the province at a facility, which purifies gases from plants that upgrade oil-sands bitumen into synthetic crude oil.
Kinder Morgan Inc. and Enterprise Products Partners LP are the two biggest U.S. pipeline companies.
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