Alberta government approves proposed diluent recovery project to boost crude export room

Ongoing pipeline project delays and growth in crude-by-rail capacity from Western Canada are leading some oilsands producers to consider spending billions of dollars to build diluent recovery units. An oil worker holds raw sand bitumen near Fort McMurray, Alta., on July 9, 2008. THE CANADIAN PRESS/Jeff McIntosh

A Calgary-based company’s proposal to build a 100,000-barrel-per-day diluent recovery unit (DRU) near Hardisty, Alta., has been approved, the Alberta government said in a news release on Tuesday.

The project is aimed at freeing up space in pipelines and on railcars for oil exports.

“Approving this project demonstrates our government’s commitment to supporting innovative technology and enhancing our reputation as a leader in responsible energy development,” Energy Minister Sonya Savage said.

“Projects like this attract new investment, create jobs and strengthen our energy industry.”

The approval of the proposed project means the company behind it, Gibson Energy, can now work on getting environmental approvals to move on to the construction phase.

READ MORE: Diluent recovery unit proposed by Alberta company to boost crude export room

The government said the DRU “will remove diluent from blended bitumen, freeing up rail car capacity for additional oil (and) the recovered diluent will be reused by upstream oilsands producers.”

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According to the American Petroleum Institute, diluents are usually natural gas condensate, naphtha or a mix of other light hydrocarbons and are mixed with oilsands bitumen to help it flow through pipelines more efficiently.

Diluent can make up as much as a third of the volume of blended bitumen.

Gibson Energy’s website says the company hopes to have the DRU functional as early as the second quarter of 2021.

–With files from The Canadian Press

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