Sinopec joins group planning to build Alberta oil refinery
China’s Sinopec Corp. has joined a group planning to build an oil refinery in Alberta, the project’s consultant said, an enterprise that would strengthen demand and prices for the Canadian province’s heavily discounted crude.
State-owned Sinopec, formally known as China Petroleum & Chemical Corp., along with an Alberta Indigenous group, China State Construction Engineering Corp. and Alberta management company Teedrum, plan to build a refinery that will process 167,000 barrels a day of crude into gasoline and other products, consulting firm Stantec Inc. said in a statement on Thursday.
Sinopec and China Construction will provide the investment and expertise to build the refinery, Stantec said. Stantec will seek permits and regulatory approval.
The refinery would cost $8.5billion, with a financing plan among the Chinese companies, Indigenous groups and other investors still to be worked out, said Teedrum president Ken Horn, who is leading the effort. Ownership of the refinery has also not yet been determined.
The group hopes to receive regulatory approval and permits from the Alberta and Canadian governments within two years, he said in an interview.
Most of the refined products will be destined for export.
“It helps create value for the bitumen,” Mr. Horn said. “Right now, we ship most of that out of the province. We should do a lot more to maximize the value of that asset.”
Most of Canada’s crude is produced in landlocked Alberta, where pipeline capacity has not expanded as rapidly as production. Resulting bottlenecks have hindered its transportation to U.S. refineries, steepening an already deep price discount for the province’s crude, which grew to a multiyear high this week.