Williams Explores Building First Propane Dehydrogenation Facility in Canada

  • New Facility Would Convert Propane Recovered from Off-Gas Processing into Propylene
  • Project Would Build on Williams’ Unique Business in Canada, Capture Incremental Value from Off-Gas Processing

TULSA, Okla.--()--Williams (NYSE:WMB) announced today that it is exploring building a propane dehydrogenation (PDH) facility in Alberta, Canada. A new PDH facility, which would be the first in Canada, would allow Williams to significantly increase its production of polymer-grade propylene from its Canadian operations. Williams is the only company in Canada producing polymer-grade propylene, a valuable petrochemical feedstock used in plastics manufacturing.

Williams would primarily use the propane it recovers at its Redwater facility near Edmonton, Alberta, as feedstock for the new PDH facility, which would convert the propane into higher-value propylene that will be transported to the U.S. Gulf Coast. The associated hydrogen by-product would be sold locally in the Alberta market.

“Building a PDH facility would further build on the value and expertise that we’ve built in Canada and serve the booming North American petrochemical market,” said David Chappell, president of Williams Energy Canada. “Besides our expertise in extracting and marketing these products, we have the infrastructure in place with fractionation, distribution and storage to fully realize the value from a new PDH facility.

“Because of our existing facilities, we would be able to capture value from PDH production byproducts – butane/butylene and ethane/ethylene – that another PDH operator would have to burn,” Chappell said. “We’ve built a unique business in Canada and we’re continuing to explore ways to capture more of the off-gas available from existing and planned upgraders, and to add more value to the products we produce.”

Williams’ proposed PDH facility in Canada would have an annual capacity of approximately 1 billion pounds. The company estimates capital expenditures of approximately $600 million to $800 million that would be funded primarily with international cash on hand.

Williams’ Operations in Canada: Innovative Business, Emissions Reducer

When producers convert the Canadian oil sands into usable oil, the process produces an off-gas byproduct that includes a rich mixture of natural gas, NGLs and olefins. Williams pioneered the process of extracting the mixture from the off-gas at its Fort McMurray, Alberta, facility, which is located on-site at a third-party oil-sands production facility.

Williams currently recovers approximately 14,000 barrels per day (bpd) of an NGL/olefins mixture from its facility in Fort McMurray. The mixture includes propane, propylene, butane, butylenes and condensate. Expansions are currently underway that will enable the company to also recover 10,000 bpd of an ethane/ethylene mix.

After it extracts the off-gas mixture, Williams returns the clean-burning natural gas to the third-party oil-sands producer for its operations. It then transports the remaining NGL/olefins mixture, via the recently placed into service Boreal Pipeline, to its Redwater facility outside of Edmonton for further separation.

Williams’ off-gas processing reduces emissions of carbon dioxide (CO2) — a greenhouse gas — in Alberta by approximately 0.2 million tons each year and cuts emissions of sulphur dioxide (SO2) — a contributor to acid rain — by more than 1,700 tons each year. The new off-gas expansions will further reduce both carbon dioxide and sulphur dioxide emissions in Alberta.

About Williams (NYSE: WMB)

Williams is one of the leading energy infrastructure companies in North America. It owns interests in or operates 15,000 miles of interstate gas pipelines, 1,000 miles of NGL transportation pipelines, and more than 10,000 miles of oil and gas gathering pipelines. The company’s facilities have daily gas processing capacity of 6.6 billion cubic feet of natural gas and NGL production of more than 200,000 barrels per day. Williams owns a 68-percent ownership interest in Williams Partners L.P. (NYSE: WPZ), one of the largest diversified energy master limited partnerships. Williams Partners owns most of Williams’ interstate gas pipeline and domestic midstream assets. The company’s headquarters is in Tulsa, Okla.

Portions of this document may constitute “forward-looking statements” as defined by federal law. Although the company believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Any such statements are made in reliance on the “safe harbor” protections provided under the Private Securities Reform Act of 1995. Additional information about issues that could lead to material changes in performance is contained in the company’s annual reports filed with the Securities and Exchange Commission.

Contacts

Williams
Media Contact:
Jeff Pounds, 918-573-3332
or
Investor Contacts:
John Porter, 918-573-0797
or
Sharna Reingold, 918-573-2078

Release Summary

Williams Explores Building First Propane Dehydrogenation Facility in Canada

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Contacts

Williams
Media Contact:
Jeff Pounds, 918-573-3332
or
Investor Contacts:
John Porter, 918-573-0797
or
Sharna Reingold, 918-573-2078