Sturgeon Refinery creates $1.9B loss for Alberta's petroleum marketing commission
Cost of project balloons to $10.1 billion
The Alberta Petroleum Marketing Commission lost $1.88 billion in 2019 due to the much-delayed Sturgeon Refinery, according to its latest annual financial statements.
The commission, a commercial arm of Alberta Energy, lost $163 million in 2018. The financial statements as of Dec. 31, 2019 are contained within Alberta Energy's annual report, which was released last week.
The Sturgeon Refinery, 45 kilometres northeast of Edmonton, has had a troubled history.
The cost of the project was estimated at $5.7 billion when construction started in 2013 but now sits at $10.1 billion. The refinery switched to processing bitumen feedstock earlier this year.
The project is equally owned by North West Refining Inc. and Canadian Natural Resources Ltd.
The Alberta government has a 30-year agreement with the North West Redwater Partnership to provide 37,500 barrels of bitumen per day, which represents 75 per cent of the refinery's daily processing capacity, and pay a processing fee.
The government receives the finished product, which is then sold by the petroleum marketing commission.
According to the financial statements, the value of that agreement was assessed to have a negative net present value of $2.52 billion as of March 31, the end of the 2019-20 fiscal year.
The Alberta Energy annual report calls that amount a "snapshot in time" that varies according to changes in commodity prices. APMC reviews the processing agreement each year.
In a written statement, Energy Minister Sonya Savage said the government believes the results will improve in the future. She said the government neither owns nor operates the facility.
"Our involvement is principally financial in nature, managed by the Alberta Petroleum Marketing Commission," Savage said.
"While we do not operate the refinery, we are engaging with the North West Redwater Partnership to ensure that this project, and our involvement in the project, are optimized for the benefit of Alberta taxpayers.
"We continue to take a close look at our contractual relationship with the refinery to protect Alberta taxpayers and to ensure that they benefit over the long term."