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Canada’s Inter Pipeline Ltd. has started production at a new $4.3 billion (US$3.3 billion) petrochemical plant in Alberta, a key milestone for a project that was at the center of a takeover battle for the company last year.
The unit of Brookfield Infrastructure Partners LP commissioned its Heartland polypropylene plant and began initial production in late June, according to a statement from the company. The remainder of the plant, including the propane dehydrogenation facility, is on schedule to start operation and begin commercial production in the third quarter.
The Heartland project faced cost overruns and delays due to the COVID-19 pandemic, putting pressure on Inter Pipeline’s stock and helping to make it vulnerable to an unsolicited takeover bid from Brookfield.
The Calgary-based energy infrastructure company launched a strategic review, including seeking potential partners for Heartland, and secured a higher offer from Pembina Pipeline Corp. But Brookfield sweetened its bid and eventually prevailed in a $8.6 billion deal.
The Alberta plant will convert locally-produced propane into 525,000 metric tons a year of polypropylene, a polymer used to manufacture items including food packaging, textiles, health-care products and medical supplies, the company said. Inter Pipeline has secured contracts for 70 per cent of the plant’s output for an average of nine years, according to the release.