Construction on phase one of Sturgeon Refinery given the go-ahead

A major announcement was made Thursday, when it comes to bitumen refining in our province. Construction for phase one of a new refinery in Alberta has been given the go-ahead.

The Sturgeon Refinery will be built in Alberta’s Industrial Heartland, about 45 kilometres northeast of Edmonton, near Redwater. The plant will take in approximately 50,000 barrels of raw bitumen per day, and transform it into diesel fuel and other materials.

“Psychologically, it’s a resurrection of Alberta’s ability to not just extract bitumen and natural resources but, to process it here at home,” said Neil Shelly, Executive Director, Alberta’s Industrial Heartland Association.

“It helps us find another market for the bitumen that is produced in this province, and so, not only is it important to export bitumen, it’s important to upgrade it here in Alberta, create the jobs, capture the value here in Alberta,” added Energy Minister Ken Hughes.

The Heartland region saw what Shelly calls a ‘gold rush’ between 2004 and 2008, when eight similar projects were slated for the area. However, those projects quickly began to fall off the table due to rising costs and the recession.

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“We went from sort of a boom to a bust with regard to development,” Shelly said adding, “Things have been very quiet on the front since then.”

North West Upgrading has partnered with Canadian Natural Resources Ltd. in the joint venture. A 30-year agreement is in place so that 75 percent of the bitumen needed will come from the Alberta Petroleum Marketing Commission, an agent of the province.

“The province went through a tender process to try and find somebody who would maximize the value, the royalty of the bitumen they produce, and we were lucky enough to win that process,” said North West Upgrading board chairman Ian MacGregor.

Construction on the $5.7 billion project is set to begin in the spring of 2013, and will take three years to complete. Shelly says the plant will have a huge impact on Alberta’s economy.

“During the construction phase we’re going to have, probably, an average of 3,000 to 4,000 workers on site, and those workers will come from the local community around here, not just in the Heartland region but, in the entire Edmonton region,” said Shelly.

“This is a very advanced thing that we’re building, and the people that work on it are going to be some of the highest order, technical people that are employed in Alberta,” added MacGregor.

Once the plant is up and running, about 400 permanent jobs will be created.

“Conservative figures show that for every direct employee it creates two spinoff jobs in the supply and service sector,” explained Shelly.

This could eventually become a three-phase project. Should the other phases of the facility get built, the refinery will have the capacity to process 150,000 barrels of bitumen a day.

With files from Vinesh Pratap, Postmedia News.