The provincial government gave a major boost to the North West upgrader in Sturgeon County yesterday, paving the way for construction next spring.
The government announced North West has come out as the lead company to upgrade barrels from the proposed bitumen royalty in kind (BRIK) program, following a request for proposals issued earlier this year.
The government will now negotiate an agreement with North West the two hope to have signed by the end of the year.
North West announced a partnership with Canadian Natural Resources Limited (CNRL), earlier this year where the company agreed to pay 50 per cent of the costs for the upgrader and supply bitumen to the plant.
Energy department spokesperson Bob McManus said the government felt North West’s project would best fit the BRIK program.
“We feel that the Northwest proposal, along with CNRL, has the potential to help us meet the intent of the BRIK program, which is to increase value-added bitumen in Alberta.”
Ian MacGregor, North West’s chairman, said the company is very pleased the government selected them and is eager to get construction under way.
“It was a great day for us. We are happy to be taking the next steps on this thing,” he said. “We will be able to start pretty much as soon as we get those contracts executed.”
Sturgeon County mayor Don Rigney said the county is thrilled one of the upgraders will be getting under way.
“We are very excited about this,” he said. “What it really means is that our children and grandchildren can continue to live work and play in Sturgeon County.”
He said the investment is a boost, not just to Sturgeon County, but to the region, the province and the country.
While Sturgeon can expect a significant boost in tax revenue, Rigney said the majority of the taxes flow to other levels of government and the biggest bonus is the jobs the project will produce.
Under the proposal, Northwest will receive 75,000 barrels per day of bitumen from the province, which they will be able to upgrade.
The barrels will be collected from other energy companies in lieu of cash for royalty payments.
MacGregor said the company is eager to get the details worked out so they can get under way.
“We made what we think was a pretty comprehensive proposal, but this is obviously a large project and there are things that will need to be negotiated.”
The proposed upgrader is a three-stage, 150,000-barrel per day plant that would take bitumen from the oilsands and refine to ultra-low sulphur diesel. It is also designed to sequester carbon dioxide.
MacGregor estimates there will be 3,000 construction jobs. Building all three phases could take 10 years.
The government’s commitment, along with a commitment from CNRL, gives the company 100,000 barrels of bitumen. MacGregor said that is enough for the company to build the first two phases.
