Chi­nese firms, In­dige­nous groups pro­pose new re­fin­ery

Fort McMurray Today - - ALBERTA NEWS - GE­OF­FREY MOR­GAN

Two ma­jor Chi­nese com­pa­nies and a group of Al­ber­tan In­dige­nous com­mu­ni­ties are propos­ing to build a new oil­sands re­fin­ery and petro­chem­i­cal complex in the prov­ince, ac­cord­ing to a press re­lease is­sued by con­sul­tants Stan­tec Inc.

Beijing-based and sta­te­owned China Petroleum & Chem­i­cal Corp., bet­ter known as Sinopec, along with China Con­struc­tion In­dus­trial & En­ergy Co. Ltd. and a con­sor­tium of Al­berta In­dige­nous groups signed an agree­ment with the Ed­mon­ton-based en­gi­neer­ing and de­sign firm Stan­tec Inc. on Thurs­day to pur­sue per­mits for a new bi­tu­men re­fin­ery.

Ac­cord­ing to a Stan­tec re­lease, the part­ner­ship of Sinopec, China Con­struc­tion and the In­dige­nous groups will be called Si­noCan Global, which will be­gin seek­ing per­mits to build a 167,000-bar­rels-per-day bi­tu­men re­fin­ery and petro­chem­i­cal complex north of Ed­mon­ton.

If built, it would be­come the sec­ond-largest re­fin­ery in Al­berta af­ter Im­pe­rial Oil Ltd.’s 194,000-bpd Strath­cona Re­fin­ery in Ed­mon­ton.

“We are very ex­cited to be work­ing with Si­noCan Global on this bi­tu­men-based re­fin­ery and petro­chem­i­cal fa­cil­ity,” Stan­tec CEO Gord John­ston said in the re­lease.

While Stan­tec will pro­vide con­sult­ing and reg­u­la­tory as­sis­tance, Sinopec and China Con­struc­tion will pro­vide “the ex­per­tise and in­vest­ment needed to de­velop the fa­cil­ity.”

“Stan­tec Con­sult­ing Ser­vices has been se­lected to per­form the reg­u­la­tory re­view and per­mit­ting pro­cesses for the pro­ject,” ac­cord­ing to the re­lease. “The global de­sign firm will also lever­age lo­cal re­la­tion­ships and en­gage in strong stake­holder re­la­tions to en­sure Si­noCan’s suc­cess in the Al­berta mar­ket­place.”

The re­lease did not in­clude the in­vest­ments re­quired to build the re­fin­ery but a pro­ject of that mag­ni­tude would range in the bil­lions of dol­lars.

The North West Re­fin­ery, which has re­cently been com­pleted in the same re­gion, pro­cesses 50,000 bpd and cost $9.5 bil­lion. That pro­ject was the first new re­fin­ery to be built in Canada in 30 years.

“Stan­tec has sig­nif­i­cant en­ergy and re­sources and en­vi­ron­men­tal sci­ence ex­pe­ri­ence, and we are ex­cited to work on a pro­ject to boost in­vest­ment and op­por­tu­nity in Al­berta’s en­ergy mar­ket,” John­ston said.

The com­pa­nies in­volved were in a joint meet­ing Thurs­day af­ter­noon and not im­me­di­ately avail­able for com­ment be­fore dead­line.

De­tails are scarce on which First Na­tions will be part­ners in the pro­ject with the two Chi­nese com­pa­nies, but the re­lease from Stan­tec in­di­cates a group called Al­berta First Na­tions En­ergy Devel­op­ment will own an eq­uity stake in the pro­ject. Tee­drum Inc., an Ed­mon­ton­based com­pany, work­ing in part­ner­ship with the Al­berta First Na­tions En­ergy Cen­tre, will lead the devel­op­ment.

An eq­uity stake in a ma­jor pro­ject would rep­re­sent a sig­nif­i­cant en­ergy hold­ing for First Na­tions in the prov­ince. Last Novem­ber, Fort McKay First Na­tion and Mikisew Cree First Na­tion in­vested $503 mil­lion to ac­quire a 49 per cent stake in Sun­cor’s East Tank Farm, which is used to store oil­sands crude be­fore it is shipped to mar­ket.

A First Na­tions group is also propos­ing the Ea­gle Spirit En­ergy oil pipeline con­nect­ing Fort McMur­ray, Alta. to Grassy Point, B.C.

PHO­TOGRAPHER: KEVIN LEE/BLOOMBERG NEWS

Lo­cal In­put~ A China Petroleum and Chem­i­cal Corp. (Sinopec) gas statins stands next to a petroleum byprod­uct pro­cess­ing plant in Shang­hai, China, on Sun­day, Feb. 15, 2009. China, the world's sec­ond-big­gest en­ergy con­sumer, may ap­prove a stim­u­lus plan for the oil re­fin­ing and petro­chem­i­cals sec­tor by next week to help spur the slow­ing econ­omy, two in­dus­try of­fi­cials said.

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