May 19th, 2024

ATCO subsidiary to build new Alberta pipeline to supply gas to petrochemical project


By Amanda Stephenson, The Canadian Press on May 8, 2024.

Alberta Premier Danielle Smith speaks at the Dow Chemical announcement, that will finalized plans to construct the world's first net-zero carbon emissions ethylene and derivatives complex, in Fort Saskatchewan Alberta, on Wednesday November 29, 2023. Canadian Utilities Ltd., a subsidiary of Calgary-based holding company ATCO Ltd., says it plans to build a new natural gas pipeline in Alberta to supply a massive net-zero petrochemical project being built northeast of Edmonton. THE CANADIAN PRESS/Jason Franson

CALGARY – Canadian Utilities Ltd., a subsidiary of Calgary-based holding company ATCO Ltd., plans to build a new, $2-billion natural gas pipeline in Alberta that will supply a massive net-zero petrochemical project being built northeast of Edmonton.

The project will be the largest-ever energy infrastructure project by an ATCO Energy Systems company, said chief operating officer Wayne Stensby in an interview.

Stensby said the pipeline will supply natural gas to Dow Chemical’s $9-billion Path2Zero facility, which is being built near Fort Saskatchewan, Alta. and is billed as the world’s first net-zero-emissions integrated ethylene cracker and derivatives site.

The Dow project was given the go ahead last November and involves an expansion and retrofit of Dow’s existing manufacturing site in Fort Saskatchewan. The project will include the building of a new hydrogen-fueled ethylene cracker, as well as carbon capture and off-site sequestration.

But Dow won’t be the only user of the new natural gas pipeline, Stensby said. He said Canadian Utilities has identified more than $20 billion of proposed industrial expansion projects and emissions-reduction projects by its customers in Alberta.

“We shouldn’t be understating the significance of those investments, whether it be Dow or whether we’re talking about hydrogen, building materials, or petrochemical investments,” Stensby said.

“Very large companies are making very large investments as they look to lower the carbon footprint of their manufacturing processes and manufacturing businesses.”

Stensby added economic growth is also a key driver of natural gas demand in Alberta.

“And some of this gas will eventually find its way to residential homeowners, because we’re also seeing increased levels of population growth – really record growth – across our province.”

The new pipeline, called Yellowhead Mainline, will be around 200 kilometres long and will run from the hamlet of Peers in west-central Alberta to the northeast Edmonton area.

It is expected to have the capacity to deliver one billion cubic feet per day of natural gas.

Construction on the new pipeline is expected to begin in 2026, Canadian Utilities said, and it should be operational in the fourth quarter of 2027.

This report by The Canadian Press was first published May 8, 2024.

Companies in this story: (TSX:CU)

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