The government of Alberta recently signed contracts supporting 2 projects that will have a significant impact on the province’s energy sector.

The first project is a bitumen refinery northeast of Edmonton to be built by a partnership of North West Upgrading Inc. and Canadian Natural Resources Ltd. The project, which will combine gasification technology with CO2 management, will upgrade and refine bitumen received by the province under its bitumen royalty-in-kind (BRIK) initiative into higher value products such as ultra low sulphur diesel, diluents and naphtha. Phase 1 of the refinery, processing 50,000 bpd of bitumen, is scheduled for completion in 2014 – with expansion potential for two subsequent phases of 50,000 bpd each.

The second project is supported by agreements which pave the way for the installation of CO2 capture facilities at the new bitumen refinery, initially capturing approximately 3,500 tonnes per day of CO2. Enhance Energy’s proposed Alberta Carbon Trunk Line (ACTL) will take the captured carbon dioxide from the refinery and another plant and deliver it south for use in enhanced oil recovery, before being sequestered. The ACTL project is receiving $495 million under Alberta’s Carbon Capture and Storage Funding Act.

These projects will increase bitumen refining capacity in the Province as well as removing a significant volume of CO2 from the refining process. According to a government backgrounder, injecting CO2 will help producers recover additional oil that will have the potential to generate up to $15 billion in royalties for Alberta.