The Government of Alberta has been looking at potential upgrading projects for a number of years in order to try and add value to the hydrocarbon resources prevalent in the region. These studies have been under the mandate of the Hydrocarbon Upgrading Task Force (“HUTF”), a joint government and industry initiative to develop business cases and promote opportunities for new refining and petrochemical investment in Alberta. The HUTF was established in February 2004.
In 2006, the Government of Alberta, under the HUTF, retained David Netzer, Consulting Chemical Engineer, to develop a conceptual design for an integrated bitumen upgrading, refining and petrochemical complex in Alberta – “Alberta Bitumen Processing Integration Study” by David Netzer, Consulting Chemical Engineer and Associates, March 2006 (the “2006 Study”)1. This study built on previous reviews with the aim of assessing whether an integrated complex transforming bitumen into a variety of high value products is technically feasible.
Up until early 2013 the Government of Alberta had not made any further assessments of the concept.
In late March 2013 the Alberta Federation of Labour (“AFL”) approached Edward Osterwald (now a Partner with CEG Europe in London) to assess the potential economics of such an “in-province upgrading, refining, and associated value-added petrochemical complex” using the configuration set out in the 2006 Study. The request followed publication of Mr Osterwald’s appraisal of a proposed green field oil sands refinery on the west coast of Canada at Kitimat, on behalf of the Government of British Columbia (“Review of the Proposed Kitimat Refinery Project”2). That report was published on 14 March 2013, at which time Mr Osterwald was a Managing Director with Navigant Consulting.
The objective of the current study for AFL is to examine the potential economics of in-province upgrading of oil sands produced within Alberta and whether such a project that should be looked at in more detail.