Ruling UC party to continue NDP’s petro project credit program
The United Conservative government in Alberta says it will carry on with a program introduced by the former NDP regime to use $1.1 billion in energy royalty credits to encourage new petrochemical projects.
But it will cancel two other NDP energy diversification schemes offering loan guarantees and grants because they carry a higher financial risk for Albertans, Energy Minister Sonya Savage told Canadian Press Wednesday.
One program worth $500 million was designed to back petrochemical feedstock infrastructure projects and the other, worth $1 billion, to encourage more partial upgrading of crude by developers in Alberta.
“This (credits) program has demonstrated success in developing projects in a financially responsible way with private industry taking the lead,” said Savage on a conference call.
The decision means the end of a $440-million loan guarantee announced by the NDP last January under the partial upgrading program to help Value Creation Inc. build a $2-billion upgrader near Edmonton that would convert diluted oilsands bitumen into medium synthetic crude and diesel.
The Calgary-based company, which had a non-binding letter of intent for the guarantee, has been told the program will not be continuing, Kavi Bal, senior press secretary for Savage, told Canadian Press.
The province says it will also cancel an NDP call for proposals for refinery projects, which would have included potential government support.
About $150 million in credits from the $1.1 billion available under the second round of the petrochemical program announced last year have already been awarded, said Dale Nally, associate minister of natural gas.
The government is in the process of going through applications to allocate the rest but has not yet set a timeline, he added.
The first round of the NDP’s petrochemical program resulted in $200 million in credits for Inter Pipeline Ltd. and $300 million for Pembina Pipeline Ltd., both of which are building multibillion-dollar projects in central Alberta to turn propane into polypropylene plastic.