The Alberta government offered a C$440 million ($330 million) loan guarantee Tuesday to a proposed refining customer for Canada’s top industrial natural gas user, thermal oilsands production.
Provincial Premier Rachel Notley announced the backing as an enabler for Calgary-based Value Creation Inc. to launch construction of a C$2 billion ($1.5-billion) bitumen processing plant near Edmonton.
The project would have a construction payroll of 2,000 to build a 200-employee plant for converting 77,500 b/d of molasses-like bitumen into diesel fuel and partially upgraded synthetic light oil for other refineries. Production would start in 2022.
The loan guarantee offer is part of an industrial diversification program that has emerged as a key plank in the provincial New Democratic Party government’s campaign platform for an Alberta election scheduled for this spring.
“We’re taking the bull by the horns and fighting to get full value for our oil,” said Notley in the support offer.
“We’re not content to sit on the sidelines and let good jobs and investment pass Alberta by for places like Louisiana. That has happened for too long and it has got to stop.”
The loan guarantee offer is in a preliminary stage with a letter of intent, leaving completion of a project support deal for negotiations between the corporate sponsor and the government.
Last month IHS Markit in a report said U.S. imports of Canadian heavy crude oil were expected to increase over the next two years, but the pace of oilsands growth also was expected to slow because of the declining number of projects under active development.