Nov 20 (Reuters) - Alberta said on Tuesday that it will double its incentives for companies developing new plants to make petrochemical products, as the Western Canadian province seeks to diversify its economy beyond crude extraction and export.
The province will now provide royalty credits worth C$2.1 billion ($1.6 billion), up from earlier commitments totaling C$1.1 billion, to projects that convert natural gas and oil into value added products like gasoline, fertilizer and plastics.
Alberta said it was expanding the program after receiving 23 applications from Canadian and international companies for the incentive program, representing C$60.2 billion in potential investment in the province.
"It sends a clear signal that companies from around the world want to invest in Alberta," said Margaret McCuaig-Boyd, Minister of Energy, in a statement. "We need to put our foot on the gas pedal."
The province has been struggling with sagging oil and gas prices, as rising crude output has outstripped existing pipeline takeaway capacity, while gas production that used to be sold into the Northeastern United States has been displaced by expanding U.S. supplies.
In Alberta, most petrochemical upgrading uses natural gas byproducts like ethane, propane and butane.
The province first launched the petrochemical incentives in 2016. Two projects, including Inter Pipeline Ltd's C$3.5 billion petrochemical plant near Edmonton, were approved to share the original C$500 million in royalty credits. It announced the second round earlier this year.
Alberta also said it would double its support for petrochemical feedstock plants, which provide the raw materials for petrochemical upgrading.
$1 = 1.3245 Canadian dollars Reporting by Julie Gordon in Vancouver; Editing by David Gregorio