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The project is the most prominent effort to attract major investment into Alberta’s petrochemical sector, adding value to raw resources, while underscoring corporate efforts toward decarbonization
There’s plenty of debate today surrounding pipelines and other proposed energy developments in Alberta, but one of the largest active projects in the province just received a welcomed shot of certainty.
Dow Inc.’s massive $10-billion, net-zero petrochemical project is moving ahead in Fort Saskatchewan, with a new timeline for startup in late 2029 — a two-year delay from its initial target.
Last April, the Michigan-based chemicals producer delayed construction plans on its “Path2Zero project” northeast of Edmonton to reflect market conditions, as Dow was looking to reduce corporate capital spending last year by US$1 billion.
On Thursday, Dow said it expects to start the project’s first phase by the end of 2029; it was initially planned to begin in 2027. (The company also announced a major corporate restructuring, and will eliminate 4,500 positions globally.)
A second phase of the Alberta project will be operating by the end of 2030, a year behind its original timeline but sooner than what some analysts had anticipated.
“The fact they’re recommitting to the project, I think, is huge,” said Bill Rawlusyk, an industry expert with S&P Global Commodity Insights in Calgary.
“It’s clear they believe in this project and think it’s a good long-term investment, and that’s why it’s moving forward — even as it seems like we’re in this prolonged down-cycle for commodity chemicals right now,” added Seth Goldstein, a senior equity analyst at Morningstar.
The new timeline will enable Dow to line up its capital spending with overall industry market conditions, company CEO Jim Fitterling told analysts on an earnings call.
Total project capital spending of US$7.5 billion (C$10.1 billion) is expected following the delay, according to a corporate presentation.
“We’ve determined that completing the project with a two-year delay is the most value-creating option,” Fitterling said.
“We remain committed to the strategic rationale of the project and the upside that it will enable in targeted applications like pressure pipe, wiring cable and food packaging.”
The project is the most prominent effort to attract major investment into Alberta’s petrochemical sector, adding value to raw resources, while underscoring corporate efforts toward decarbonization. Dow said the project would be the world’s first net-zero integrated ethylene cracker and derivatives complex.
The initiative was officially given the green light by the company in November 2023, as Dow looked to triple ethylene and polyethylene capacity from its existing petrochemical complex in Fort Saskatchewan.
The project is expected to create up to 5,500 jobs during peak construction and approximately 400 to 500 full-time jobs once it’s fully operating, according to the company’s website.
“We’re encouraged by the progress and look forward to seeing the economic benefits it will bring to Alberta,” provincial Jobs and Economy Minister Joseph Schow said in a statement.
At the time the project was announced, Dow said the additional capacity would help the company capture higher-value markets, including for plastic packaging, infrastructure and hygiene items.
Segments of the petrochemical industry have been grappling with a supply glut, putting pressure on older, higher-cost facilities.
In a research note, Goldstein said Dow’s new cost-cutting measures were spurred by continued weak global demand, noting the company’s full-year 2025 results showed lower sales and margin compression. However, global capacity being shut down in Asia and Europe will help bring the market for commodity chemicals back into balance.
The company clearly has enough certainty to go forward with the project, and its startup will coincide with an expected uptick in the petrochemicals market around the end of the decade — following a period of global overcapacity in both ethylene and propylene, said Rawlusyk, director and Canadian lead of natural gas liquids with S&P Global.
The new facility is expected to be a top-performing asset due to the low-cost ethane feedstock in Western Canada.
“It shows there’s more to our resource base than just oilsands. And if Alberta really wants to think more globally, they need to think about how we fit in the global context. And this is a perfect example,” Rawlusyk said.
“Dow could have built this plant on the Gulf of Mexico, they could have built it in China, but there are enough incentives here that we can compete globally because of the low feedstock costs.”
Under the Alberta Petrochemicals Incentive Program, which provides grants to companies to attract investment, the province is expected to contribute up to $1.8 billion to the development, Premier Danielle Smith said in 2023.
On Thursday’s earnings call, Fitterling noted about 30 per cent of the total project capital spending is complete and several milestones have been reached, such as the procurement of heavy equipment.
“We’re able, so far, to see a good outlook on the cost picture,” he added.
“We’ve got the detailed engineering design essentially done. We’ve got the long lead time items procured, so we’ve got a pretty good handle on how the costs are coming in.”
The project is significant for the province, and it’s one of the largest investment decisions for a project in Alberta’s Industrial Heartland region.
It will spur other developments in the area, and it’s using hydrogen and carbon capture and storage technology to decarbonize, said Alberta’s Industrial Heartland Association executive director Mark Plamondon.
It also sends a message that “world-scale companies” are choosing to build in the area, he added.
“From our standpoint, this actually solidifies Dow’s commitment to the project and lays out a timeline . . . as to when they’re really going to be activating this and getting it up and running,” said Plamondon.
Chris Varcoe is a Calgary Herald columnist.
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