Firm looks to open $100M fuel production plant

A Calgary company hopes to start construction later this year on a $100-million demonstration plant in the Industrial Heartland that will make low-sulphur fuel for the shipping industry.

But Field Upgrading still needs to line up financing that could include up to $50 million in government investment before making a final decision to go ahead with its Clean Seas project, commercialization adviser Lisa Doig said Thursday.

The Alberta government should indicate within about a month whether it will approve Field’s application for an initial $10 million, she said.

“It’s extremely critical because of the technology risk … A sign from government shows they’re behind it, and if your government is behind your project, private equity will step in,” she said.

“If we could get roughly 30 to 50 per cent of the project funding between the governments, however they work together, that would be helpful.” The two levels of government provided funding for engineering last May.

Doig made her comments following a presentation in the Expo Centre at the annual stakeholder event for the Industrial Heartland, the region northeast of Edmonton housing more than 40 companies producing fuel, fertilizer, power, and other products.

In 2016, Field opened a small pilot plant in Fort Saskatchewan to develop cheap new technology to clean heavy oil aimed primarily at making fuel for ships, which burn about four million barrels a day of heavy oil and must meet strict sulphur restrictions coming in 2020.

The pilot plant recently resumed operating after an equipment fire last August did $7 million to $10 million in damage, Doig said.

The company, still looking for a place to build in the Industrial Heartland, wants to start producing oil at the Clean Seas demonstration plant by the end of 2019, and the target is to have one or more sites producing a total of 100,000 barrels a day by 2025, Doig said.

Meanwhile, construction is wrapping up on North West Redwater Partnership’s $9.5-billion Sturgeon refinery, described as the world’s first to incorporate carbon capture from the beginning.

The facility started using synthetic crude in December to put out 20,000 to 25,000 barrels daily of diesel and other fuel, and expects to begin processing bitumen and producing its 80,000-barrel-a-day capacity by the end of the summer, refinery president Kerry Margetts said.

There’s still no decision on whether a planned second phase that would double the size of the plant will go ahead or how much it would cost, but much of the infrastructure is already built so it should be cheaper, he said.