Alberta examines options for its investment in the Sturgeon Refinery
Originally reported at https://calgaryherald.com/
Alberta Premier Danielle Smith is exploring options to address the province's recent losses stemming from the Sturgeon Refinery. Smith expressed dissatisfaction with the current deal and is considering approaches where a private sector operator could buy the refinery, relieving the province of risks while guaranteeing a long-term bitumen supply. The $10-B refinery, sanctioned in 2012, aimed to add value to Alberta's bitumen supply but faced challenges, with costs escalating from $5.7 B to $10 B.
The refinery, operational since 2017, faced higher capital costs leading to increased tolls, impacting the province's profitability. In 2021, the government, led by Premier Jason Kenney, acquired a 50% equity share to mitigate losses, extending the bitumen processing agreement by 10 years to 2058. Energy Minister Sonya Savage defended the move, stating it was a necessary step to save an estimated $2 billion in the long term.
Despite ongoing efforts to improve efficiency and profitability, the refinery's financial outlook remains challenging. Premier Smith is seeking a cleaner engagement strategy, expressing a desire to sell the refinery, acknowledging the significant price tag due to cost overruns. The government recently increased the Alberta Petroleum Marketing Commission's borrowing limit to $2.9 B, reflecting the financial challenges faced by the refinery. While a sale of the province's stake seems unlikely, former APMC CEO Richard Masson emphasizes the province's commitment to the refinery business and the enduring consequences of the risks it has undertaken.
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