Upgrader will supply carbon dioxide to boost aging oilfield
Gordon Jaremko
The Edmonton Journal
Thursday, February 21, 2008
EDMONTON - A project that adds a green dimension to the Edmonton area's budding upgrader alley Wednesday obtained final approval from Alberta Environment.
Construction will start when negotiations currently underway with potential partners in the $4-billion development are completed, North West Upgrading Inc. president Robert Pearce said in an interview.
His firm earlier made a deal with another oil firm that will make a two-thirds cut in greenhouse-gas emissions by the project 45 kilometres northeast of Edmonton in Sturgeon County.
The North West Upgrader will supply about 3,500 tonnes per day of carbon-dioxide to Enhance Energy Inc. for injections to extend the producing life of wells in the aging Clive oilfield 130 kilometres south of Edmonton.
The greenhouse gas will stay underground, permanently "sequestered" in the geological reservoir, after driving more oil up out of the ground in an industry first for turning waste from a large bitumen upgrader project into an asset.
The deal with Enhance adds an environmental gain to employment, product price and revenue increases generated by processing oilsands output in Alberta instead of exporting raw bitumen, Pearce indicated.
"That's one of the advantages of upgrading in Alberta, in the Edmonton area," the North West president said.
Growing bitumen exports have made oilsands development a target of attacks as "dirty oil" by Canadian and international environmental groups. The critics are urging consumers and governments to boycott Alberta production for contributing more to global warming than other oil supplies.
North West continues to set a target of 2011 for up to 2,000 construction workers to complete the first of three planned 50,000-barrels-daily stages in the project.
The greenhouse-gas disposal deal only involves the initial plant but the design incorporates features that make similar arrangements possible for the entire development.
Alberta Environment's new approvals cover all three planned plant stages.
No date was set for further construction. Earth moving operations to clear and prepare the site were completed about three weeks ago, Pearce reported.
A schedule will be worked out as part of a deal that North West is seeking with other firms to cover up to half or potentially more of the project's costs, he said.
"We're in that partnering process," Pearce said, adding "it's going well" but he cannot predict a date when an ownership and financing agreement will be concluded.
The new regulatory permits include a water use licence as well as authorization to build the plant under the Alberta Environmental Protection and Enhancement Act.
The project earlier obtained economic and engineering approval from the Alberta Energy and Utilities Board, and land-use endorsements by Sturgeon County.
