Sinopec joins group plan­ning to build Al­berta oil re­fin­ery

The Globe and Mail Metro (Ontario Edition) - - REPORT ON BUSINESS - ROD NICKEL WIN­NIPEG

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.

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