Calgary – North West Redwater Partnership (NWR) announced Friday the partnership’s two boards have approved the construction of Phase 1 of the Sturgeon Refinery. NWR says it will build and operate a world-class bitumen refinery in Alberta’s Industrial Heartland, which will add significant value to Alberta’s bitumen resources in a responsible and sustainable manner. The first 50,000 barrels per day phase of the bitumen refinery has a cost estimate of $5.7 billion and is expected to take approximately three years to build, with above ground construction starting in spring 2013.
“The formal approval to develop this project is a major milestone for NWR,” said Doug Quinn, President of NWR in a release issued Friday. “A lot of time and effort has been spent during the last eight years to get us here. NWR has a great team and a well-developed plan to deliver a refinery that will operate with high reliability. It’s the right time and what we are building will add significantly to the value that Alberta receives for its bitumen.”
NWR has 30-year processing agreements for 100 per cent of its Phase 1 feedstock capacity. The Alberta Petroleum Marketing Commission, an agent of the Province of Alberta, will supply 75 per cent of the feedstock volume and Canadian Natural will supply the balance of the feedstock volume. Each party will own their proportionate share of the products produced by the Sturgeon Refinery and sold into the market.
“This project supports Canadian Natural’s marketing strategy to increase conversion capacity for heavy oil and the structure allows for participation without any reduction in our ability to stay focused on developing our vast resource potential,” said Steve Laut, President of Canadian Natural in the same release. “We are happy with the progression to this point and are pleased to be working with the people of North West Redwater, who have extensive experience in building and operating such facilities, and will help ensure the success of the project and advance the Government of Alberta’s efforts to add value to its resources here in Alberta.”
The project represents the first of three potential phases of 50,000 barrels per day accumulating to a 150,000 barrel per day plan to convert bitumen to high value products, primarily ultra-low sulphur diesel for local and export markets. “This project will demonstrate that Alberta has the lowest carbon footprint solutions for converting bitumen into diesel fuel,” said Ian MacGregor, Founder and Chairman of NWU in Friday’s release. “This is the first refinery in the world that incorporates CO2 capture into the initial design. The facility will capture 1.2 million tonnes of CO2 per year per phase, which will be sold for use in enhanced oil recovery before being sequestered.”
NWR currently has a team of more than 300 people working on the project and expects to employ more than 8,000 people during peak construction, including sub-suppliers and module fabrication yards.
In a separate press release published on Sturgeon County’s website Mayor Don Rigney expressed with delight the project was going ahead. “We have worked diligently over the past 10 years with the North West Sturgeon Refinery Project team,” Rigney said. “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.”