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Pembina announces EPC contract award for petrochemical facility

Published by , Editorial Assistant
Hydrocarbon Engineering,

Pembina Pipeline Corp. along with Petrochemical Industries Co. K.S.C. (PIC) of Kuwait, has announced that Canada Kuwait Petrochemical Corp. (CKPC) has executed a lump sum engineering, procurement and construction (EPC) contract related to the construction of the propane dehydrogenation (PDH) facility within its integrated PDH and polypropylene (PP) upgrading facility. With this contract, CKPC has fixed approximately 60% of the cost of the PDH/PP facility thus far. In conjunction with execution of the lump sum contract, Pembina also announced an update to its share of the capital cost for the PDH/PP facility and project timing.

Following execution of the lump sum EPC contract, and with cost certainty for approximately 60% of the project cost, Pembina has revised its proportionate share of the capital cost of the PDH/PP facility, including the 100% directly-owned supporting facilities, to CAN$2.7 billion. The increase over the prior estimate is associated with the PDH facility, which is now fixed under the lump sum EPC contract. CKPC now expects the facility to be placed into commercial service in the second half of 2023.

“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. Our relentless pursuit of a lump sum contract for the PDH facility reflects our disciplined and prudent approach to capital allocation,” said Mick Dilger, Pembina's President and CEO. Dilger added, “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.”

CKPC has selected Heartland Canada Partners, a 50/50 partnership between Fluor Canada Ltd and Kiewit Construction Services ULC as the EPC contractor for the PDH facility. The contractor selection process for the PP facility is ongoing.

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