$300M mini refinery to open by 2010
First new plant built since 1980s, Parkland project situated beside Petro-Canada
Gordon Jaremko
The Edmonton Journal
Thursday, September 06, 2007
EDMONTON - A target date of 2010 was set Wednesday for completing the first new refinery built in Canada in 23 years.
Up to 300 construction workers will erect a compact plant for $300 million in refinery row on Edmonton's eastern edge, said project sponsor Beaver Hills Processing GP Inc.
Only 15 to 20 permanent staff will be needed to run the Strathcona County site's new generation of efficient technology for making gasoline, diesel and petrochemicals, Beaver Hills president Rod Evans said in an interview.
The operation will be less than one-third as large as jumbo Edmonton-area plants that Imperial Oil, Petro-Canada and Shell Canada have used to satisfy most western Canadian fuel needs since the 1970s.
The youngest refinery in the region -- Shell's Scotford plant near Fort Saskatchewan, completed in 1984 for oilsands production -- was the last one built in Canada.
Since 1970, corporate efficiency drives shut down 30 refineries with total capacity of one million barrels per day across the country, according to records of the Canadian Association of Petroleum Producers.
Although there have been renovations and additions to Canada's surviving 16 refineries over the past 37 years, the Scotford project was the last free-standing new plant.
Beaver Hills is an industry newcomer, owned 50 per cent by private Calgary technology firm Corrillo Energy LP, 25 per cent by oilfield transporter Gibson Energy Ltd. and 25 per cent by Red Deer fuel retailer Parkland Income Fund. Corrillo's leading owner is a Calgary private equity firm managing $1.9 billion in energy and technology investments, ARC Financial Corp.
Parkland president Mike Chorlton said his firm's western and northern chain of 575 FasGas, RT Fuels and Short Stop outlets will obtain about 800 million litres a year or half their gasoline and diesel supplies from the 36,500-barrels-daily Beaver Hills plant.
The new refinery will use "condensate," a liquid extracted from natural gas, instead of oil as its main raw material.
Flows of the gas byproduct into the Edmonton area are expected to increase as oilsands output grows because industry uses it to thin out bitumen for pipeline shipping, Evans said.
Current oilsands projects include a proposed pipeline for condensate imports from the United States. Byproducts of bitumen upgraders could also be used as raw materials by the new refinery, he said.
Beaver Hills products will include a high grade of especially thin and clean condensate left over from fuel refining that fetches premium prices as bitumen thinner, Evans said.
Parkland will also consider reviving its mothballed Bowden condensate refinery with technical improvements, Chorlton said.
The 44-year-old Parkland plant, a landmark beside the QE II freeway between Edmonton and Calgary, stopped making fuels in 2001 due to shortages of the gas byproduct and high costs. A scaled-down operation at the site blends and stores chemical fluids used in oilfield drilling.
"We've been growing very fast. Our needs (for refined products) are growing fast," Chorlton said.
The Beaver Hills project schedule calls for completion in mid-2008 of an $8-million first phase of feasibility studies, preliminary engineering, product agreements and financing, followed by regulatory approvals and construction.
The plant site is next door to Petro-Canada in refinery row, where Evans predicted tall towers of the smaller Beaver Hills operation will make it a new landmark of the Alberta energy scene.
gjaremko@thejournal.canwest.com
© The Edmonton Journal 2007