Natural gas would become a stepping stone to produce renewable diesel fuel in Canada under a long-term contract between Imperial Oil Ltd. and Pennsylvania’s Air Products & Chemicals Inc.

Air Products would extract hydrogen from natural gas, aka blue hydrogen, at its plant near Edmonton, which would be used by Imperial to manufacture 20,000 b/d of biodiesel at the Strathcona Refinery for 200,000 b/d of oil products.

Imperial, 70% owned by ExxonMobil, last year said Strathcona wanted to add up to 20,000 b/d of renewable diesel to the mix as soon as 2024.

“This project highlights Imperial’s commitment to investing in a lower carbon future,” Imperial Vice President Jon Wetmore said. “We continue to progress discussions with our business partners and governments as we...