Alberta wants a refinery, pronto

Edmonton– On Dec. 11, Alberta Premier Rachel Notley put forward a third initiative within two weeks, aimed at improving the province’s heavy oil prospects. On Nov. 28, she announced Alberta would be buying crude oil rail cars and locomotives. Then on Dec. 2, Notley said the province would be curtailing oil production in 2019 by 325,000 bbls. Now the province is seeking a new greenfield refinery, or an expansion to an existing refinery,

In making the announcement, Notley said, “It’s not news to any Albertan that we need to get more value for our energy resources.

“It’s a conversation that has been happening at kitchen tables throughout this province, frankly, for generations. As we all know, we are dealing, right now, with an extraordinary, and punishing, oil price crisis. Every day that we are denied pipeline access to Canadian tidewater costs Canada’s economy up to $80 million. So we are acting.”

The production curtailment is the short term aspect, buying upwards to 7,000 rail cars is the medium term. The long term plan is to keep up the fight for more pipelines, and to upgrade and refine more of the province’s energy resources.

“Today I am announcing the government of Alberta is seeking expressions of interest from proponents to build a new refinery, so that we can create even more jobs, and add even more value,” Notley said. “We know companies are interested. We’ve heard it first hand. So we are stepping up.

“As the owners of this resource, we are saying, once and for all, let’s stop the talk, and start acting. Let’s start making more of the products that the world needs, right here, at home. We will consider interest in new greenfield investments, or an expansion of facilities at existing brownfield sites.”

She added, “The project must make sense for Alberta. It must have a return on investment for Albertans. And it must diversify the way we use the energy resources that we, as Albertans, all own. We need to see jobs for Albertans. We need to see the participation of Indigenous communities, and we need to see sound engineering, design and financial plans.

“Alberta has resolved to, at long last, get more value for our resources. Through getting a pipeline built to a Canadian coast, through making more products, and through refining more. That’s how we’re going to create more jobs and get more value. That’s how we’re going to reduce the punishing price differential that costs the Canadian economy up to $80 million a day.”

The Alberta government issued an expression of Interest (EOI) to determine private sector interest in building or expanding a refinery in Alberta to use more Alberta heavy oil. The deadline is quick – Feb. 8, 2019

An EOI must meet the following minimum requirements:

  • The refinery must be located within Alberta.
  • The refinery or expansion must use exclusively Alberta produced bitumen feedstock exclusively, to produce marketable refined products.
  • The proposal must be for a new greenfield investment or an expansion project in an existing (brownfield) site.
  • The project has not already achieved a final investment decision to proceed.

If an EOI does not meet the minimum requirements, it will not be considered for review.

Expressions of interest that meet the minimum eligibility requirements will be considered for further assessment based on the following nine criteria:

  1. Business plan
  2. Project timing
  3. Technology and project configuration
  4. Feedstock and refined products infrastructure
  5. Proponent’s capability
  6. The project’s economic and financial viability
  7. Economic benefits to Alberta
  8. Environmental performance
  9. Participation of Indigenous communities

In a Facebook post, United Conservative Party leader Jason Kenney responded, “So let's get this straight. After 3.5 years in office - with the Premier’s ‘social license’ pipeline scheme in shambles - today’s big ‘news’ from the NDP is that they're asking companies whether they *might* be interested in building a refinery in Alberta.

“This after the NDP has seemingly done everything possible to scare away private sector investment, including a whopping 20 per cent tax hike on job-creators at the worst possible time.

“Albertans will recognize today’s non-announcement from the NDP for what it is: the latest ploy from a tired, broke, and increasingly desperate government quickly approaching the 2019 election.

“That said, the UCP will of course review details of any plan, should something eventually be announced.”

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