Beaver Hills Processing rolls out plans for Canada’s first new refinery in 23 years

Beaver Hills Processing is ready to make its industry debut with Canada’s first new refinery in 23 years.

It is aiming to bring a C$300 million, 36,500 barrel-per-day plant near Edmonton into production in 2010, reversing a trend that has seen about 30 refineries with total capacity of 1 million bpd closed across Canada over almost four decades.

Beaver Hills is owned 50 percent by Corrillo Energy, a private Calgary-based technology firm, and 25 percent each by oilfield transporter Gibson Energy and Red Deer-based fuel retailer Parkland Income Fund.

Corrillo’s major owner is ARC Financial, a Calgary private equity firm managing C$1.9 billion in energy and technology investments.

Parkland expects to obtain about 800 million liters of gasoline a year — or half its total sales — from the Beaver Hills refinery through its chain of 575 outlets in western and northern Canada.

The plant’s main feedstock will be condensate extracted from natural gas rather than crude oil.

Condensate is used to thin out bitumen to facilitate its shipment through pipelines.

There is a plan to overcome a condensate shortage in Alberta by building a pipeline from the U.S. Midwest and Beaver Hills hopes to access those supplies.

The company is also pondering a revival of a 44-year-old condensate refinery in central Alberta that stopped making fuels in 2001 due to shortages of the gas byproduct and high costs. A smaller facility has been operating since then, blending and storing chemical fluids used in oilfield drilling.

The next stage for the Beaver Hills refinery will be the completion of an C$8 million feasibility study, expected about mid-2008.

—Gary Park