The proposal to build the second phase of a diesel refinery located in Sturgeon County has been withdrawn by the companies spearheading the project.
North West Refining, which is partnered with Canadian Natural Resources Ltd. on the project, announced on Friday that it will be withdrawing the phase two proposal, which was submitted to the provincial government about one year ago.
For now the project is stalled but Ian MacGregor, chairman of North West Refining, said that he has confidence that the second and third phases will be completed, although he does not have a timeline for the project.
“We are not the type of people that are easily dissuaded once we decide to do something, and that is not just me but that is everybody who is associated with it. We know we are doing the right thing,” MacGregor said.
The chairman said that the proposal was withdrawn because the first phase was taking longer than anticipated and they wanted to get the first of three stages up and running before proceeding.
“We felt the best thing to do was to withdraw that proposal until that plant was in full operation,” MacGregor said. “We are engineers so we know it is going to work but the non-engineers aren’t sure of that so we want to prove to them that we can.”
Sturgeon County Mayor Alanna Hnatiw said she was disappointed but not surprised to hear that phase two has stalled.
“It is unfortunately a byproduct of the current economic and political climate that we find ourselves in,” Hnatiw said.
The mayor said that she wants to see the refinery do well and succeed and that they are a valued business in the community. The refinery will soon be the largest taxpayer in the county with around $15 million anticipated in next year's budget.
“If there is an opportunity for them to make any structural improvement that will improve the way they are doing things then I am all for that extra time for them to become more efficient and effective before they move on to the other phases,” Hnatiw said.
Right now the first phase is operating at 60 per cent. MacGregor said that it will be fully operational sometime this summer.
Phase one was built with the help of the provincial government but the project has come under scrutiny as the costs jumped from an estimated $5.7 billion in 2013 to $9.5 billion.
MacGregor said that he anticipates the second and third phases to cost less, as a lot of the infrastructure will already be in place.
During construction the refinery brought around 4,000 jobs to the region and will employ around 400 people in the summer. This is the first diesel refinery and the first new refinery built in Canada since 1984.