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Pledging Progress | The First Nations Energy Centre could move ahead in two years, but is there room on Upgrader Alley?

Sep 1, 2010

by Jack Danylchuk


As a reminder that Alberta aboriginals want to be significant players in the province’s energy industry, Eddy Makokis, grand chief of Treaty Six First Nations, renewed a pledge earlier this year to build a $6-billion heavy oil sands upgrader and refinery in the Alberta Industrial Heartland.

The goal is to begin building the Alberta First Nations Energy Centre in two years, Makokis said. Aboriginal people would be given priority in filling the 4,500 construction jobs and an estimated 1,000 positions that would become available when the upgrader and refinery begin operating. As envisioned in 2007, the refinery would process 125,000 barrels per day of bitumen, produce 100,000 barrels per day of finished transportation fuels and nearly 18,000 barrels per day of synthetic crude oil, liquefied petroleum gas and petrochemicals feedstock primarily for the export market. Once in full operation, the centre would capture up to 3.88 million tonnes per year of carbon dioxide.

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Then the recession intervened, knocking out the financial feet from beneath $80 billion worth of projects slated for Upgrader Alley. Despite that setback, Ken Horn, the energy centre’s chief promoter, said in an interview that operations will begin in 2015, the original target date. Horn, president of Teedrum Inc., the energy centre’s managing partner, said that he has been in discussion with Engineers India Ltd., who are experienced in designing and building refineries, and may look to India for financing as well, but declined to discuss details.

So far, the only project to dig its way free of the recession is North West Upgrading Inc.’s 150,000-barrel-per-day upgrader.

Peter Howard, interim president of the Canadian Energy Research Institute, says the North West upgrader will create a surplus in diesel fuel, leaving little room for projects like the Alberta First Nations Energy Centre. “The economics of building a refinery now is kind of sketchy,” says Howard. “It may open up again, but the margin is a little thin and will likely stay that way.”

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