Building a New North American Refinery

Dec. 11, 2012
North West Redwater Partnership announces sanction for the construction of Phase 1 of the Sturgeon Refinery.

North West Redwater Partnership (NWR, a partnership between North West Upgrading Inc. (NWU) and Canadian Natural Upgrading Limited (CNUL), a wholly owned subsidiary of Canadian Natural Resources Limited (Canadian Natural), is pleased to announce that the Board of Directors for each partner has approved the construction of Phase 1 of the Sturgeon Refinery. NWR will build and operate a world class bitumen refinery in Alberta’s Industrial Heartland, which will add significant value to Alberta’s bitumen resources in a responsible and sustainable manner. The first 50,000 barrels per day phase of the bitumen refinery has a cost estimate of $5.7 billion and is expected to take approximately three years to build, with above ground construction starting in spring 2013.

“The formal approval to develop this project is a major milestone for NWR,” said Doug Quinn, President of NWR. “A lot of time and effort has been spent during the last eight years to get us here. NWR has a great team and a well-developed plan to deliver a refinery that will operate with high reliability. It’s the right time and what we are building will add significantly to the value that Alberta receives for its bitumen.”

NWR has thirty year processing agreements for 100 per cent of its Phase 1 feedstock capacity. The Alberta Petroleum Marketing Commission, an agent of the Province of Alberta, will supply 75 per cent of the feedstock volume and Canadian Natural will supply the balance of the feedstock volume. Each party will own their proportionate share of the products produced by the Sturgeon Refinery and sold into the market. Steve Laut, President of Canadian Natural commented, “This project supports Canadian Natural’s marketing strategy to increase conversion capacity for heavy oil and the structure allows for participation without any reduction in our ability to stay focused on developing our vast resource potential. We are happy with the progression to this point and are pleased to be working with the people of North West Redwater, who have extensive experience in building and operating such facilities, and will help ensure the success of the project and advance the Government of Alberta’s efforts to add value to its resources here in Alberta.”

50,000 barrels per day
This project represents the first of potentially three phases of 50,000 barrels per day accumulating to a 150,000 barrel per day plan to convert bitumen to high value products, primarily ultra-low sulphur diesel for local and export markets. “This project will demonstrate that Alberta has the lowest carbon footprint solutions for converting bitumen into diesel fuel,” said Ian MacGregor, Founder and Chairman of NWU. “This is the first refinery in the world that incorporates CO2 capture into the initial design. The facility will capture 1.2 million tonnes of CO2 per year per phase, which will be sold for use in enhanced oil recovery before being sequestered.”

NWR currently has a team of over 300 people working on the project and expects to employ over 8,000 people during peak construction, including sub-suppliers and module fabrication yards.

North West Redwater Partnership was formed in 2010 as a 50/50 partnership between NWU and CNUL, a wholly owned subsidiary of Canadian Natural to build the world’s first bitumen refinery which will combine the already proven processes of gasification technology with an integrated carbon capture and storage solution. The Sturgeon Refinery, which will be located 45 km north-east of Edmonton, is also the first bitumen refinery to sell its CO2 for the purposes of enhanced oil recovery. NWR could expand capacity to convert 150,000 barrels of bitumen directly to fuels and other high value, low sulphur products required in the Alberta and world markets in three equal phases of which Phase 1 has now been sanctioned. The process is also optimized to minimize the environmental footprint of the facility and make the bitumen upgrading/refining process sustainable in Alberta.

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