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Inter Pipeline warns of higher costs, delays for Alberta petrochemical project

Inter Pipeline's Heartland Petrochemical Complex is shown under construction in Fort Saskatchewan, Alta., on Thursday, January 10, 2019. .
Inter Pipeline's Heartland Petrochemical Complex is shown under construction in Fort Saskatchewan, Alta., on Thursday, January 10, 2019. . THE CANADIAN PRESS/Jason Franson

Inter Pipeline Ltd. is warning that the cost of building its Heartland Petrochemical Complex has risen by about half a billion dollars and its in-service date may be delayed due to factors including the impact of the COVID-19 pandemic.

When announced in December 2017, the cost of the plant northeast of Edmonton designed to convert plentiful Alberta propane into polypropylene plastic pellets for export to manufacturers was estimated at $3.5 billion.

The Calgary-based company says the project now is expected to cost about $4 billion following a detailed analysis of work that remains after $2.5 billion spent to date.

Inter adds measures at the construction site to deal with the pandemic could push startup to early 2022 from the initial schedule to open in late 2021.

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In March, Calgary-based Pembina Pipeline Corp. reported it would defer construction of its proposed nearby similar petrochemical project because of market conditions. It had increased the estimated cost by $400 million to $4.9 billion in January.

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Inter says it is continuing its quest announced late last year to enlist a partner to share costs of the project. Pembina’s project is a 50-50 joint venture with Petrochemical Industries Company of Kuwait.

Pembina was awarded $300 million and Inter Pipeline Ltd. got $200 million in royalty credits in 2016 as an Alberta government incentive for the projects.