The North West upgrader is officially a go, officials announced this week, and that means big bucks for Sturgeon County. Sturgeon County officials announced Thursday morning that North West Upgrading and Canadian Natural Upgrading Ltd.
The North West upgrader is officially a go, officials announced this week, and that means big bucks for Sturgeon County.
Sturgeon County officials announced Thursday morning that North West Upgrading and Canadian Natural Upgrading Ltd. had officially approved construction of the first phase of the North West Redwater Partnership Sturgeon Refinery Project.
When complete, the $5.7 billion upgrader will process about 50,000 barrels of bitumen a day into diesel and other products.
This formal go-ahead is a major milestone, said Doug Quinn, president of the North West Redwater Partnership, in a press release.
“It’s the right time, and what we are building will add significantly to the value Alberta receives for its bitumen,” he said.
It was also the result of almost 10 years of work, said county Mayor Don Rigney in a press release.
“This development will enable our children and grandchildren to live, work and play in Sturgeon County, rather than following our raw resources down a pipeline,” he said.
This upgrader has been in the works for about eight years. It was originally supposed to start construction in 2008, but that year’s global recession caused its backers to hit the brakes on it for four years.
Some $700 million worth of engineering work later and the company has finally decided to start construction said North West Upgrading Chair Ian MacGregor.
“We always knew we were going to do this,” he said.
The project was never in doubt, he insisted, but there was plenty of preliminary work to do before they were sure it would go ahead.
“We’re like a bunch of ants hauling grains of sand over to one side of a teeter-totter.”
There’s an enormous amount of oil in Alberta, MacGregor said, when asked why his company decided to build the project, and someone has to turn it into fuel.
“We felt we could do as good a job as anyone else could,” he said.
Alberta could have earned about $500 million more in royalties last year had the North West upgrader been in operation, he said.
The decision to build the upgrader means an immediate cash bonus for Sturgeon County. Under a deal with the county that was renewed last May, the North West partnership group agreed to pre-pay $5,588,000 in taxes to help the county pay for the infrastructure upgrades needed to support the upgrader.
MacGregor said he expects to get a tax bill for that amount from the county shortly.
The upgrader should add $5 to $10 million a year to the county’s coffers once it’s running, said Doug Bertsch, vice president of regulatory affairs for North West Upgrading. It would also create about 8,000 jobs in the region.
The first phase of the upgrader will transform about 50,000 barrels of bitumen a day into about 40,000 barrels of diesel fuel, some of which will be sold locally, Bertsch said. Production will rise to 150,000 barrels a day if all three phases of the plant are built.
The upgrader will also be the first in the world to capture and sequester its CO2 emissions underground.
Through a deal with Enhance Energy, the plant will pipe its CO2 emissions about 200 kilometres south to an oilfield near Red Deer, where it will be injected underground to recover oil. That should eliminate about two thirds of the upgrader’s greenhouse gas emissions.
Construction on the upgrader should start this spring, Bertsch continued, and be finished by 2016. This will involve up to 5,000 construction workers on site at once, he noted – the company plans to bus in 70 per cent of these workers to prevent traffic jams.
Don’t expect to see much activity on the construction site this winter, though, MacGregor added.
“It’s not a rush to get in the field,” he said, and they plan to take this nice and slow.
The Gazette will have more on this development in the days to come.
