Chemical dow made a construction break on his $ 11.6 billion petrochemical project Northeast of Edmonton due to the uncertain economic state of the world.
The company said on Thursday that it delays the construction of its Path2zero project in the Industrial heart To correspond to the market conditions, which, according to Dow, should save around $ 1 billion.
The DOW project implies an expansion and modernization of the existing Dow manufacturing site along the northern Saskatchewan river north of Fort Saskatchewan.
The project was to include the construction of a new hydrogen ethylene cookie, as well as carbon capture and out -of -site sequestration.
“Dow reproduced the expenses and the rhythm of important parts of the project while the low growth in GDP continues to have an impact on our industry. The increase in macroeconomic and geopolitical volatility should persist in the short term,” the company said in a statement to Global News.
“Consequently, we slow down mobilization on the ground to match the market calendar and preserve species until we see the demand conditions improve.”
A rendering of the Dow Chemical Path2zero Net-Zero Petrochemical project in the industrial heart.
Credit: Dow Chemical
It is not surprising among the current pricing movements made by President Donald Trump and the way in which the global markets reacted, according to economic experts.
“Trump’s prices have taken a key in many Canadian business plans where you have to make decisions that will have consequences for the decades to come,” said Moshe Lander, economist at the University of Concordia and resident of Alberta.
“When you see the market go up and down, when you do not know where the prices go, you can imagine, then, a company will say:` `wait, I want to sit and make sure that what I think is a profitable investment East It will be a profitable investment ‘- and when you have the White House which makes 180s on a daily basis and that sometimes 180 double something they have said before, his is not at all surprising.
“These are some of the consequences of tariff wars beyond what it could mean for consumers.”
The project was announced for the first time in 2021Given the green light after being fully funded in 2023, and the construction began in 2024. The first phase was to start in 2027 and the second in 2029.
Dow said that he would finish the home office (engineering and purchase) to improve construction preparation and in the coming weeks, the project management will take time to examine the impact of the decision to suspend additional work.
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“The long -term strategic justification of the Path2zero project remains strong and we are committed to completing this project,” Dow said in his press release on Thursday.
Lander said this statement should be made with a grain of salt.
“What will they say?” We are only committed if things work well, otherwise thank you but no thank you? “Of course, they must say, because in the event that they proceed, they must have the good will of the provincial government, the local population and workers who would like to work for a company that has sun and happiness.
When he announced two years ago, the Dow’s Path2zero installations were presented as the first cracker and derivative derivatives and derivatives integrated into greenhouse emissions and the greenhouse integrated into the world.
The project was aimed at converting cracker out of gas into hydrogen as a suitable fuel to use in the production of ethylene. Carbon dioxide had to be captured on site and then transported to be stored by adjacent partners.
The project was to increase polyethylene capacity of the American company of chemistry of two million tonnes per year and to decarbonize its global ethylene capacity by 20%.
Lander said that with all the knowledge and expertise of oil and gas accumulated in Alberta during the last century, a project of this nature would have been a big step to advance industry in net direction all over the world.
“It is the type of thing that would be great for Alberta, ideal for the region of the capital, but it is also one of these things that its circumstances beyond our control, and there are only few politicians that the Prime Minister can do,” said Lander.
“There are only so many trips that it can make taxpayers’ money in the United States to try to provoke a kind of exemption, and there is so much threat that it can make the federal government, whatever the part it is.”
Lander said that DOW’s decision could encourage companies involved in less profitable or more risky efforts to follow the future in stop plans.
“The projects could be canceled, which could have been in sight, or existing projects could be suspended on the grounds that there was a supposition, perhaps something would happen on the market that no longer happens,” said Lander.
“This has consequences that have repercussions beyond this only project.”
The government of Alberta said that the DOW installation would produce 3.2 million metric tonnes of polyethylene and ethylene derivatives.
He had to provide up to 8,000 jobs during construction and 500 full -time jobs once he has opened. Lander predicts that the project will only resume if the world economy becomes more stable.
“The reality is ultimately is a profit -based company. What speaks to me more than anything else is not a press release, but the main thing is finances,” said Lander.
“If there are no benefits to make, I can guarantee you that they are not more attached to Edmonton than any other place in North America.”
Two federal tax credits – the carbon capture tax credit, the use and storage of investment as well as the tax credit on clean hydrogen investment – had to provide up to $ 400 million to support the project and were delivered in advance “to obtain shovels in the soil,” said the deputy Chrystia Freeland at the time in 2023.
THE The province also provided a subsidy of 12% of a value of 1.8 billion dollars to the project through the Petrochemistry incentive program of Alberta.
The office of the Minister of Energy said that the break is a commercial decision and that all related questions should be sent to DOW.
“We are encouraged to hear that Dow continues to see this as a key priority of the company and that construction work remains underway, even if they slow down the construction of the Path2zero growth project in 2025,” said the province, adding that the project is very important for Alberta and the economy.
Last May, Canadian Utilities Ltd., a subsidiary of the Calgary portfolio company, ATCO LTD., announced its intention to build a new 2 billion dollars pipeline to provide natural gas to path2zero facility.
The new pipeline, called Yellowhead Mainline, will take place about 200 km long and will go from the hamlet of peers in the center-west of Alberta to the northeast region of Edmonton.
The project must be the largest energy infrastructure project by an ATCO energy systems company, which said that the line will take place despite DOW’s decision.
“At a time when the need for Canadian energy infrastructure is in the spotlight, the main line of Yellowhead remains a necessary critical infrastructure project to support a wide range of customers and industries to help meet the energy needs of Alberta,” said the energy needs of ATCO Energy Systems, Jason Sharpe on Thursday afternoon.
The pipeline should have the capacity to deliver a billion cubic feet per day of natural gas.
“The main line of Yellowhead is still necessary by the many customers who make up the vast majority of contractual volumes, from the fourth quarter of 2027 with the 90% pipeline under contract,” said Sharpe, even adding with the change of chronology, Dow remains engaged in his Path2zero project.
The construction of the new pipeline is expected to start in 2026, said Canadian public services, in order to be operational in the fourth quarter of 2027.
“The project of the main line of Yellowhead remains fashionable, joining the regulatory processes and allowing the competitive advantage of the province while meeting the energy requirements of our population and our growing industries.”
– With Amanda Stephenson and Bill Graveland files, the Canadian press