Canadian Natural Resources and North West Upgrading are expected to announce a long-awaited deal to process bitumen for Alberta’s government, spurring construction of a C$5 billion ($5.05 billion) refinery to handle the oil.
The Alberta government said it plans a news conference in the region that will be the site of the proposed plant, hosted by the premier and energy minister. An Alberta Energy official said details would be released.

Canadian Natural, the country’s biggest independent oil explorer, and its joint venture partner were short-listed last year to process oil paid to the provincial government under the Bitumen Royalty in Kind programme, which allows producers to pay royalties with bitumen in lieu of cash.

The partners are expected to start construction of the first 50,000 barrel per day (bpd) phase of a plant that will eventually process 150,000 bpd. The facility will turn bitumen directly into diesel fuel and other products rather than the synthetic crude oil produced by other upgraders.

The plant is to be located at Fort Saskatchewan, Alberta, near the provincial capital of Edmonton. It was first planned around the middle of the last decade, but the credit crunch stalled development.

North West would not confirm the news conference would be about the bitumen refinery, but a local official took the announcement of the deal as a given, and the Edmonton Journal newspaper reported the agreement was signed.
Alberta Premier Ed Stelmach and Ron Liepert, the energy minister, are expected to talk about “a new era in value-added development and clean energy production in Alberta,” the government said.

Neil Shelly, executive director of Alberta’s Industrial Heartland Association, said the plant’s go-ahead means a major economic boost for the region, which includes three counties located northeast of Edmonton.