Alberta Premier Rachel Notley put out a call for proposals for new refining capacity in the province amid pipeline constraints that have forced cutbacks in oil production.
The call for expressions of interest says projects must provide "a strong return on investment for Albertans" and "consume Alberta-produced oil feedstock and produce marketable refined products." It does not specify which type of crude is to be used in the facility — heavy crude, light or synthetic oil, or condensate — all of which are produced within the province.
A lack of pipeline capacity and brimming storage has the Alberta government, which owns most of the petroleum resources in the province, looking at ways to increase its revenue from oil sales. Earlier in December, Notley announced a production cutback of 325,000 barrels per day to take effect in January 2019 in an effort to boost prices for Alberta crude products.
Alberta will accept submissions from project proponents until Feb. 8, 2019, when it will consider moving forward with a formal request for proposals, according to a Dec. 11 statement. "Albertans have been talking about getting more value for our oil here at home," Notley said in the statement. "So let's stop the talk, end the decades of dreaming and start making more of the products the world needs here at home."
Alberta already has a financial relationship with the Sturgeon refinery near the capital city of Edmonton, a facility jointly owned by Canadian Natural Resources Ltd. and closely held North West Upgrading Inc. The plant, which is designed to turn tar-like bitumen into diesel fuel and other products, is expected to reach its capacity of 80,000 bbl/d by year-end. The province agreed to pay the refinery's operators a fixed rate to process bitumen it receives as royalties and later provided loan guarantees to the project amid spiraling construction costs. The announcement did not mention the province's interest in the facility.
Companies including Suncor Energy Inc., Exxon Mobil Corp.'s Imperial Oil Ltd., and Royal Dutch Shell PLC have invested heavily in large, highly complex refineries in the Edmonton area that are capable of turning raw bitumen into gasoline and other fuels. The province has a single, mothballed condensate refinery in Bowden, Alberta, which is owned by fuel seller Parkland Industries Ltd. and used as a blending plant. The call for expressions of interest asks companies to submit engineering design, technical feasibility, project timing and an execution plan along with other information by the deadline. It will consider new projects or expansions of projects at existing industrial facilities.