The province has signed a restructuring deal that also extends the length of Alberta’s processing contract with the refinery by 10 years, to 2058.
The deal means less taxpayer risk in the long-term and it won’t cost the province any more than it was already obligated to pay as a toll payer, the province said Monday.
The government-owned Alberta Petroleum Marketing Commission has a contract to provide bitumen to the refinery.
Under the terms of the new deal, the province will pay North West Refining $425 million for its 50 per cent equity stake in the refinery and will pay Canadian Natural Resources Ltd., which will continue to own the other 50 per cent of the refinery, $400 million.
As a result of making the payments now, the province will not have to pay approximately $1 billion in tolling payments over the next 30 years. It will also get to play a decision-making role in the refinery’s operations.
In a news release, Energy Minister Sonya Savage said the restructuring will benefit Albertans in the long run.
“We are taking action to get a better deal for taxpayers and reducing long-term costs. This agreement provides more economic certainty which will benefit Albertans today and into the future,” Savage said.
Construction was completed on the $9.7-billion Sturgeon Refinery in the fall of 2017 and it was to begin processing as much as 80,000 barrels per day of heavy bitumen in early 2018 after starting up with partly upgraded synthetic crude from oilsands mines.
However, it did not begin processing until 2020 after two years of delays, blamed mainly on equipment failures.
A report from Alberta’s Department of Energy said the Alberta Petroleum Marketing Commission had a $2.68-billion net loss last year due primarily to “onerous” tolling contracts with the Sturgeon Refinery.
Kathleen Ganley, energy critic for Alberta’s NDP Opposition, called for more details of Monday’s equity agreement to be immediately released.
“Albertans should be deeply concerned that Jason Kenney has made them part-owners of one of the most notorious Conservative boondoggles in Alberta history,” Ganley said in a release.