Energy Minister Frank Oberle says the PC government remains committed to the Sturgeon bitumen refinery.
Photograph by: Gavin Young , Calgary Herald
The government revealed this summer that it will pay $26 billion in tolls to the Sturgeon refinery — formerly known as the North West Upgrader — to process bitumen it receives as royalties over the 30-year life of the project. Previously it had committed to pay $19 billion.
In an op-ed published in the Herald this week, former Tory energy minister Ted Morton said that the hefty price tag makes “it even less likely that the investment will ever break even.”
But Frank Oberle — appointed energy minister by new Premier Jim Prentice on Monday — said the project remains profitable for the government.
“We are convinced in the value of this project and in the value it creates for our industry, for the upgrading potential it has in Alberta and the job-creating potential it has,” Oberle said in an interview Wednesday,
The project also helps the province leverage the price differential between conventional oil and bitumen, he said.
During the summer Progressive Conservative leadership campaign, Prentice said there was a strong benefit from the project because it increased upgrading and the production of diesel in Alberta.
The refinery, under construction near Fort Saskatchewan, will be operated by a partnership between North West Upgrading Inc. and Canadian Natural Upgrading Ltd., a subsidiary of Canadian Natural Resources Ltd.
Its first phase will process 50,000 barrels per day of raw bitumen under fee-for-service processing agreements with the Alberta government and CNRL.
Alberta will provide 75 per cent of the bitumen under the government’s bitumen-royalty-in-kind (BRIK) program.