North West Upgrading Inc.

February 16, 2011 11:03 ET

North West Upgrading Signs Agreement on Government of Alberta Bitumen Barrels

Bitumen refinery in Redwater area will generate thousands of jobs, billions in tax revenues

FORT SASKATCHEWAN, ALBERTA--(Marketwire - Feb. 16, 2011) - North West Upgrading Inc. (NWU) has signed an agreement with the Government of Alberta to process barrels of bitumen under its bitumen royalty-in-kind (BRIK) initiative.

"This agreement gives the Province of Alberta more control over its bitumen resources, and significantly more opportunity to profit from them," said Ian MacGregor, Co-founder and Chairman of NWU, who was in Fort Saskatchewan for the announcement. "After all, it's Albertans who own the bitumen, and they should be getting the maximum value possible from it."

NWU also announced today it has signed a partnership agreement with Canadian Natural Resources Limited. The partnership will build, manage and operate the new bitumen refinery near Redwater, Alberta.

"We feel really lucky to be partnering with Canadian Natural, whose team can bring additional expertise and experience to this project," said MacGregor.

Canadian Natural President Steve Laut added, "This is a great opportunity for Canadian Natural to be part of a project that not only supports the Alberta Government's efforts to create value by keeping refining in the province, but also supports our marketing strategy to ensure conversion capacity for our products and create shareholder value. Working together with the North West Upgrading management team, who have extensive experience in building and operating such facilities, will help ensure the success of the project and complements our well balanced and vast asset portfolio."

In addition to the BRIK barrels, the bitumen refinery will process volumes supplied by Canadian Natural. The facility will be built in three equal phases of 50,000 bpd each, with the first phase alone estimated to employ 8,000 people over two and a half years.

MacGregor said the secure feedstock means NWU can quickly put hundreds of engineers to work in Calgary, with construction in Sturgeon County expected to ramp up early in 2012.

"We always wanted to build in Alberta's Industrial Heartland because we know the world's best trades are based there," he said.

An ultra low sulphur diesel will comprise nearly half of the facility's output, with the remainder to include products also in high demand, such as diluents, naphtha and natural gas liquids.

The project is the only one of its kind in the world to combine gasification technology with CO2 management. The facility will capture 1.2 million tonnes of CO2 per phase, which will be sold to Enhance Energy Inc.'s Alberta Carbon Trunk Line for use in enhanced oil recovery before being sequestered.

The Province has awarded a portion of its Carbon Capture and Storage Fund to a joint application submitted by NWU and Enhance Energy Inc. The partnership will deduct its share of this Fund from the processing fee the Province will pay for refining its barrels.

"By processing the Province's barrels of bitumen we can maximize the resource's value at a fair price, giving Albertans the biggest bang for the buck," said MacGregor. "The terms of the processing fee ensure that the Province of Alberta always profits as the facility does. The BRIK initiative is doing exactly what it was created to: it's keeping jobs, taxes and revenues in Alberta and creating opportunities for other petro-chemical industries."

More about North West Upgrading Inc.

North West Upgrading is building the world's first bitumen refinery which combines gasification technology with an integrated carbon capture and storage solution. The project, which will be located 45 km north- east of Edmonton, is also the first bitumen refinery to sell its CO2 for the purposes of enhanced oil recovery. NWU is converting 150,000 barrels of bitumen directly to fuels and other high value, low sulphur products required in the Alberta market. The process is also optimized to minimize the environmental footprint of the facility and make the bitumen upgrading/refining process sustainable in Alberta.

Contact Information