Deals 07 Feb 2019 Ashurst advises Petrochemical Industries Company K.S.C. on integrated petrochemical facility with Pembina Corporation 

International law firm Ashurst advised Petrochemical Industries Company K.S.C. (PIC) on definitive agreements with the Calgary-based transport and midstream provider Pembina Pipeline Corporation (Pembina) for the construction of a 550,000 metric tonnes per annum integrated propane dehydrogenation plant and polypropylene upgrading facility (Facilities) to be strategically located in Sturgeon County, Alberta, Canada (Project). The Project is being developed by Canada Kuwait Petrochemical Corporation (CKPC), a 50/50 joint venture between PIC and Pembina.

The parties announced positive final investment decisions for the Project on 4 February 2019. The capital cost estimate for the Project is CA$4.5 billion (gross), including the Facilities and related supporting facilities. The Facilities are expected to be in-service in mid-2023 (subject to environmental and regulatory approvals). Parts of the supporting facilities will be directly developed and owned by Pembina under an agreement with CKPC for long-term use of the facilities. PIC will market CKPC's full slate of homopolymer, random and impact copolymers globally, with a focus on the North American market.

CKPC brings together two strategically aligned organizations, with complementary strengths, united in developing and operating a world-scale PDH/PP Facility. PIC brings comprehensive PDH and PP project experience, along with diversified global petrochemical marketing expertise. Pembina will manage long-term propane supply and provide Alberta-specific operating and project execution experience, feedstock connectivity and strong producer relationships.

Commenting on the transaction, partner Simon Fraser said:  

"This is a very significant project in the Canadian petrochemicals sector, and will enable PIC to expand and consolidate in North American markets in particular. It has been a privilege to work with the PIC team and legal affairs manager Hessa Altwaijri once again, and we are delighted to have supported PIC with this innovative project and to help bring the project to this significant milestone."

The Ashurst team was led by partner Simon Fraser assisted by senior associates Matt Hartsuyker and Grant Batten. Stikeman Elliott advised PIC on Canadian law matters. Ashurst has previously advised PIC in relation to the establishment of CKPC, and in relation to the marketing agreement with CKPC.