Oil upgrading proposals worth billions
Premier Rachel Notley’s made-in-Alberta energy upgrading strategy is a step closer to creating thousands of jobs and attracting billions of dollars in private sector investment while keeping more value in the province.
Six project proposals are being considered for investment in partial upgrading of oil sands bitumen. These proposals are collectively worth nearly $5 billion of new private sector investment and could create almost 10,000 construction jobs with 500 more jobs during operations.
“For decades, Albertans have been talking about getting more for our oil by upgrading more here at home. We’re taking action to make that a reality. By supercharging energy upgrading in Alberta, we can create more jobs and open more markets to finally get top dollar for our resources,” said Notley.
Partial upgrading is an emerging technology that reduces the thickness of oil sands bitumen so it can flow through pipelines more easily, without having to be blended with diluent. This provides significant cost savings to industry, increases pipeline capacity by up to 30 per cent, and provides access to more refineries around the world.
“We’re kick-starting a new era of energy diversification in Alberta. These strong proposals show companies want to make big investments and create opportunities in our province. Our made-in-Alberta energy upgrading strategy is a win for energy producers and a win for all Albertans,” Margaret McCuaig-Boyd, Minister of Energy, said.
These opportunities were made possible through the Energy Diversification Act, introduced in March 2018. The government committed up to $1 billion in incentives to help leverage billions more in private investment to build partial upgrading facilities.
The government will review the short list of proposed projects for their economic viability and how they demonstrate the best possible value for Albertans while meeting the province’s world-leading plan to do the right thing for the environment. Discussions will begin with the companies in the coming weeks.
Partial upgrading reduces the thickness of oil sands bitumen so it can flow through pipelines more easily, without having to be blended with diluent. This not only reduces significant industry costs for diluent but also increases the volume of bitumen that can be shipped through pipelines by up to 30 per cent, making Alberta’s industry more competitive and enabling more refineries to process Alberta’s bitumen products.
Partial upgrading is one of the initiatives supported through the Energy Diversification Act. The government will commit to $1 billion in incentives for partial upgrading over eight years beginning in 2019-20, which will include a variety of fiscal tools including loan guarantees and grants.
Premier Notley recently doubled support for petrochemical upgrading, which was also made possible under the act. Total investment will now reach $2.1 billion to help create as many as 15,500 jobs during construction of multiple petrochemical facilities across the province. Once operational, another 1,000 jobs could be created with private-sector investment expected to reach $20.6 billion.
The made-in-Alberta energy upgrading strategy builds on the government’s earlier work to create jobs, develop new markets and add more value to Alberta’s resources within the province.