Heartland Petrochemical Complex in April 2020. (Supplied by CNW Group/Inter Pipeline Ltd.)

By The Canadian Press / David Opinko

incentive program

Alberta gives $408M to Inter Pipeline for Heartland Petrochemical Complex

Apr 5, 2021 | 4:00 PM

CALGARY – Inter Pipeline says it will receive $408 million in cash grants for its Heartland Petrochemical Complex under an incentive program by the Alberta government, but will have to give up $200 million in royalty credits granted by the previous government.

In a news release, the Calgary-based company says its $4-billion integrated propane dehydrogenation and polypropylene production facility being built northeast of Edmonton will be the first recipient of the grant announced in October by the United Conservative Party government.

“We applaud the Alberta government for spurring further petrochemical investment in Alberta and continuing to support the Heartland Petrochemical Complex,” says Christian Bayle, President and CEO of Inter Pipeline. “The fact that the program has a structured and logical approach makes it very competitive with other jurisdictions in North America and also substantially enhances the economics for future petrochemical investments in Alberta.”

The same project, designed to transform abundant Alberta propane into plastic beads to be exported to manufacturers, received $200 million in royalty credits in 2016 under the previous NDP government’s incentive program.

Inter Pipeline was also awarded up to $70 million through the government’s Petrochemical Diversification Program in 2019.

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The Canadian Taxpayers Federation is not happy that the company is set to receive its third major subsidy from the provincial government since 2016.

“At some point, our politicians need to stop letting Inter Pipeline shove its snout further into the taxpayer trough,” said Franco Terrazzano, the CTF’s Alberta Director. “The fact that this company seems to need subsidy after subsidy should be a huge red flag for taxpayers.”

The cash grant is to be paid to Inter Pipeline in equal installments over three years once the complex is operational, expected in early 2022. The grants are to cover up to 12 per cent of eligible capital costs.

The Alberta Government says the project will have employed 16,000 Albertans directly and indirectly through construction and site operations. This includes over 300 permanent positions.

“We’re fully committed to getting Alberta’s economy back on track, and petrochemicals will help build a resilient, diversified future for Albertans. Projects like these are key to expanding the opportunities connected to Alberta’s energy resources,” says Energy Minister Sonya Savage.

Inter Pipeline is continuing to fend off a hostile takeover bid by Brookfield Infrastructure Partners LP that values the company at $7.1 billion.

Brookfield is offering $16.50 per share in cash or 0.206 of a Brookfield Infrastructure Corp. class A exchangeable share, with the maximum cash available set at $4.9 billion. The offer is set to expire on June 7.

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