The Government of Alberta has signed a letter of intent to provide a $440 million loan guarantee to technology developer Value Creation Inc. to help the company build a bitumen partial upgrader in Strathcona County.
It’s the first funding announcement under Alberta’s Partial Upgrading Program.
Officially launched in June 2018, the program made $1 billion available in grants and loan guarantees for companies to develop partial upgrading projects.
The province’s goal is to diversify markets for Alberta bitumen and increase its value by processing it to a higher quality, allowing it to flow through pipelines with reduced diluent requirements. Partial upgrading is expected to be less costly than full upgrading to light synthetic oil, which is done at several existing facilities in Alberta.
Value Creation says the first phase of its Heartland Complex will process 77,500 bbls/d of diluted bitumen into a medium crude oil and an ultra low sulphur diesel. A news release from the province indicates that this project would carry a capital cost of just $2 billion.
The project is the new iteration of the former Heartland Upgrader project proposed by former Value Creation subsidiary BA Energy Inc. Through this, and a regulatory amendment that was approved in spring 2018, Value Creation has regulatory approval for 173,000 bbls/d of upgrading capacity at the site.
The company has no existing production or processing operations. It says the Heartland Complex would use a partial upgrading technologies that it has been developing over several years: accelerated decontamination, clean oil cracking and clean oil refining.
In addition to an expected 30 percent reduction in costly diluent requirements, Value Creation says the system would reduce GHG emissions by 16 percent per barrel compared to existing bitumen extraction processes.
Value Creation will need to raise additional capital in order to proceed to a final investment decision. The company said it expects the facility to be operating by 2022.
You can read more of the news on source