Stoughton refinery advancing on multiple fronts

Estevan – Dominion Energy Processing Group Inc.’s proposal for a 40,000 bpd refinery at Stoughton has been picking up steam on multiple fronts, and could get a big boost from the recent provincial budget.

The March 22 provincial budget announced, “The Oil Processing Investment Incentive encourages processing of our oil resources in the province, with royalty credits on new production.”

That incentive could provide up to $75 million in royalty credits that a new refinery could pass on to oil producers providing its feedstock. (See related story above.)

Dominion’s CEO, Keith Stemler, when told on March 26 of the budget announcement, said, “This is great news for sure.

“We had a discussion quite a while ago,” he said of their discussions with the Ministry of Economy. However, not much had been said since. He will need time to process this development before commenting further.

On March 8 Dominion’s parent company, Tempe, Az.-based Quantum Energy Inc., filed an S-1 prospectus with the United States Securities and Exchange commission. That prospectus is being reviewed by the SEC and is not yet active.

Stemler, spent a substantial portion of March on the road in Saskatchewan, meeting with government officials in Regina, potential vendors in the region and others. On March 21 he made a presentation to members of the Estevan Chamber of Commerce and city council. The following day he spoke to the Weyburn Chamber of Commerce at their annual general meeting.

While the company now has an engineer of record, they have not yet made who that is public. The engineer of record will act as an engineering, procurement and construction management company for the project.

The project’s dollar value has now risen to C$750 million, according to Stemler.

On March 21 Dominion signed a non-binding letter of intent (LOI) with Ceres Global Ag Corp. to evaluate the use of Ceres’ Northgate Terminal as an in-take and off-take partnership for the proposed Stoughton refinery. The two sites are approximately 91 kilometres apart as the crow flies, so any development would require a transportation strategy between the two facilities.

“Having this LOI in place has allowed both parties to functionally move forward toward an agreement,” said Stemler, Dominion CEO. “Ceres Northgate Terminal, through its connection to the BNSF Railway, has agreed to assess supplying supplemental Bakken Sweet Crude for the Stoughton Refinery as well as purchasing finished product off-take such as ultra low sulphur diesel, ultra low sulphur gasoline and jet ‘A’ fuels.”

“Dominion and our engineer of record will work closely with Ceres to explore all commodity requirements and Canadian and U.S. logistics to and from the Northgate terminal,” said Stan Wilson, Quantum CEO.

Paul Ferguson, general manager of energy and industrial products with Ceres, confirmed to Pipeline News on March 22 that they were in discussions with Dominion.

He noted their $100 million Northgate Commodity Logistics Centre had two 120-car loop tracks plus associated yard tracks for a total of seven miles of rail. There is room to add a third loop track if the opportunity presents itself, as well as additional yard tracks. “It appears to be an opportunity to be a good fit,” Ferguson said.

Through its connections on the BNSF rail line, it connects Saskatchewan to both the U.S. Gulf Coast and West Coast, as well as much of the nation.

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