Alberta approves funding for Sturgeon refinery

The government of Alberta has approved up to $1 billion (Can.) in financing for North West Redwater Partnership’s (NWR) recently delayed bitumen refinery project already under construction near Redwater in Sturgeon County, about 45 km northeast of Edmonton (OGJ Online, Nov. 13, 2012).

Alberta’s Ministry of Energy has authorized Alberta Petroleum Marketing Commission (APMC)—an agent of the province as well as feedstock supplier for the project—“to borrow up to $1 billion from the Crown or any other person, as well to lend money, acquire shares, or enter into a joint venture or partnership or provide guarantees” to fund the Sturgeon refinery, according to council orders published on Jan. 10.

In December, NWR partners North West Upgrading Inc. and Canadian Natural Upgrading Ltd., a wholly owned subsidiary of Canadian Natural Resources Ltd., announced a decision to postpone construction of the first phase of the Sturgeon refinery due to rising capital costs (OGJ Online, Dec. 5, 2013).

Once completed, Phase 1 of the project will be 50,000 b/d and will capture 1.2 million tonnes/year of carbon dioxide to be sold for use in enhanced oil recovery. Two further phases with capacities of 50,000 b/d each also are planned for the refinery.

Under 30-year processing agreements, APMC will supply 75% of the feedstock. CNRL will supply the rest. The suppliers will receive proportionate shares of the products, the main one of which will be ultralow-sulfur diesel.

Despite the delay, work on the project has progressed over the past year, including detailed engineering on many process units as well as the commencement of site preparation activities (OGJ Online, Dec. 20, 2013).

Commissioning of Phase 1 commercial operations currently is planned for September 2017.

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