The Alberta government has agreed to support Value Creation’s (VCI) C$2bn ($1.5bn) bitumen upgrader project in the Alberta Industrial Heartland near Edmonton in Canada through a C$440m ($300.1m) loan guarantee.
Through the bitumen upgrader project, diluted oil sands bitumen will be upgraded into a higher-value crude blend to enable easier flow through pipelines. This is expected to result in significant cost savings to the industry as it would lower the need for diluent, said the Alberta government.
At the same time, the resulting crude blend from the project will help increase pipeline capacity by up to 30% while giving access to more refineries across the world that currently cannot accept the oil sands bitumen produced in Alberta.
Alberta Premier Rachel Notley said: “We’re taking the bull by the horns and fighting to get full value for our oil. Albertans have been talking about this for decades, and we’re not content to sit on the sidelines and let good jobs and investment pass Alberta by for places like Louisiana. That has happened for too long and it has got to stop.
“We’re making sure the next generation of Albertans have the opportunities they deserve in a stronger, more resilient, more diversified province.”
The Alberta government expects the partial upgrading technology at the facility to bring down greenhouse gas (GHG) emissions by 16% per barrel in comparison to the present day processes used for extracting bitumen.
The bitumen upgrader project carried out by VCI and its subsidiary Value Chain Solutions in Strathcona County will create over 2,000 construction jobs and a further 200 full-time roles following its commissioning.
The first phase of the Value Chain Solutions – Heartland Complex (VCS-H) will use 77,500 barrels-per-day (bpd) of diluted bitumen as feedstock to produce a medium synthetic crude oil and an ultra-low sulfur diesel.
Construction on the bitumen upgrader project is already in progress, with some foundational infrastructure built while design work has been almost completed.
The facility is expected to begin operations in 2022 and upon its completion would be the first commercial-scale partial bitumen upgrader in the world to use the new technology developed by VCI.
VCI and Value Chain Solutions chairman and CEO Columba Yeung said: “Our project is going to create good, long-term jobs with game-changing technology for low-cost upgrading and strong environmental performance.”