Proposed Alberta upgrader to process RIK bitumen

Guntis Moritis
OGJ Production Editor

HOUSTON, Jan. 28 -- Canadian Natural Resources Ltd. together with North West Upgrading Inc. has submitted a proposal to Alberta for constructing and operating a bitumen upgrader and refinery near Redwater in Sturgeon County.

CNRL said "This submission enables the Alberta government to achieve its objective to upgrade its bitumen share of royalties from Alberta producers."

In conjunction with the proposal, CNRL plans to acquire 50% of the assets of NWU and form a partnership to construct and operate the facility.

It expects to finalize the acquisition later this year.

Phase 1 of the proposed upgrader includes a one-step conversion of 50,000 b/d of bitumen to finished products. The process incorporates gasification to convert the bottom of the barrel to hydrogen and reduce the need for natural gas.

The company plans to use the CO2 generated at the facility for enhanced oil recovery, thereby reducing emissions. CNRL said "when onstream, the facility will be one of the most advanced upgrading and refinery complexes in the world from an environmental perspective."

It added "the proposed facility can be expanded in two additional identical phases of 50,000 b/d of bitumen, provided economics justify the investment."

CNRL will hold a 50% interest in the facility and will supply 12,500 b/d of its own bitumen production to Phase 1 of the facility.

NWU's website says that in February 2005 it competed the environmental impact assessment for the project and in August 2007 received Alberta Energy and Utilities Board (EUB) approval. It started site preparation work in October 2007 and has completed front end engineering and procurement of long lead, crucial equipment. NWU plans were for Phase 1 to be fully operational in 2013.

Contact Guntis Moritis at guntism@ogjonline.com.

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