The chairman of North West Upgrading told a room full of industry watchers his company has almost everything in place and will begin construction of its upgrader this spring.
Company chairman Ian MacGregor spoke Thursday at the Alberta Industrial Heartland Association’s annual stakeholder update and said the contract between North West and the provincial government to refine bitumen is almost complete.
“Everything is going fine. We are working through these things. They are very complicated agreements and we have to work through these things,” he said. “There have been thousands of man hours spent by lawyers on this thing so it is just not a simple project.”
The company was awarded a contract last year to upgrade 75,000 barrels of bitumen that the government will begin collecting in lieu of royalty payments through the bitumen royalty-in-kind (BRIK) program.
Those barrels, combined with a supply from the company’s partner Canadian Natural Resources Limited, will give the company enough supply to build the first two phases of their proposed 150,000-barrel per day upgrader in Sturgeon County.
That agreement has allowed the company to move forward on the planned upgrader after it had been stalled.
MacGregor would not pin down exactly when the contract with the government would be completed and signed, but said he absolutely intends to have construction under way later this year.
“Soon. I can’t get more quantitative than that,” he said. “These things have a ramp to them. We want to be fully engaged in the spring.”
Sturgeon Mayor Don Rigney said having the project so close to construction is great news for the county and for Alberta.
“It is good news for all Albertans. We are the largest owner of the resource in the world, the largest producer, and it is imperative that we get the maximum value.”
The North West project intends to take raw bitumen from the province and refine it to diesel fuel.
MacGregor said the upgrading industry should be encouraged in Alberta because it adds more revenue to government and more jobs to Albertans,
He said there is going to be a long-term demand for this type of plant.
“There is no bitumen at the service station. Someone has to convert it,” he said. “I don’t want my kids or my grandkids to be miners. I want them to be engineers and engineers work in upgraders or refineries.”
He added that bitumen upgrading could provide carbon dioxide for sequestration that could lead to enhanced oil recovery and yet more jobs and royalties for the province.
The resignation earlier this week of Premier Ed Stelmach, was unlikely to have any impact on the BRIK program or North West’s deal said MacGregor. He said he can’t imagine a future leader looking differently at the program.
“I think that is a widely held view that is fairly robust and is no way the flavour of the day.”
Rigney said while the undertaking will put some strain on county development officers and other staff, much of the work is already done.
“I am really impressed with all the work the staff has done. This really is shovel-ready,” he said. “We have been working on this for quite a while.”
