Inter Pipeline Ltd said it would receive $325.15 million under the Alberta Petrochemicals Incentive Program to develop its Heartland Petrochemical Complex in the province.
The incentive comes as Inter is in the middle of a takeover battle with Investment firm Brookfield Infrastructure Partners , which launched a hostile C$7.1 billion bid for the pipeline operator in February.
APIP is an incentive program introduced by the Government..
of Alberta to attract investment into the development of petrochemical facilities in the region.The cash grant will be paid to Inter Pipeline in equal installments over three years once the Heartland Petrochemical Complex is operational, the company said.
"We believe it (the incentive program) sends a clear message to the international investment community — future large-scale petrochemical investments are welcome in Alberta," said Inter's Chief Executive Officer Christian Bayle.
"It is positive news," said Elias Foscolos, analyst with iA Capital Markets.
"It directly adds to the value of the plant perhaps making the probability of a partial sale more attractive in the sense the plant is worth more now, no matter how you cut it after this 'give' by the province," he added.
The C$4 billion Heartland plant near Edmonton, Alberta is Inter's first petrochemical project and its largest ever capital investment.
The plant is due for completion early next year, several months behind schedule and C$500 million over budget as a result of the COVID-19 pandemic, which has also stalled Inter's search for a joint venture partner for Heartland.
The ambitious petrochemical plant has left the Canadian company battling with cost overruns and vulnerable to Brookfield's hostile bid. ($1 = 1.2548 Canadian dollars)
(Reporting by Arathy S Nair in Bengaluru; Editing by Amy Caren Daniel)
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