Canada’s largest vertically integrated hydrocarbon producer, Imperial Oil, took a big step to diversify into carbohydrates with the announcement of a proposed $720-million biodiesel refining unit at its Strathcona refinery near Edmonton..In a statement Thursday, the company said the facility is expected to produce more than one billion litres of renewable diesel annually — or 20,000 barrels per day (bpd) — and could help reduce greenhouse gas emissions in the Canadian transportation sector by about 3 million metric tons of CO2 per year, as determined in accordance with Canada’s Clean Fuel Regulation. Imperial added that regulatory approval for the project is “expected in the near term.”.The project was first announced in August 2021 in partnership with the Province of British Columbia through a Part 3 Agreement under the BC low carbon fuel standard. A significant portion of the output will be supplied to BC truckers in support of the province’s plan to lower carbon emissions to net zero by 2050. Imperial also intends to use the renewable diesel in it own operations as part of its own broader emission reduction plans..The facility will essentially run on French fry oil. Imperial added it is presently negotiating third party supply agreements with local “biofeedstock” producers — presumably canola farmers — to feed the reactor. Further, Imperial has entered into an agreement with Pennsylvania-based Air Products for low-carbon hydrogen which will be combined with a proprietary catalyst to produce a premium lower-emission diesel fuel..Air Products in November of last year announced construction of a $1.6-billion “net-zero hydrogen energy complex” in Edmonton — including $475 million of taxpayer dollars from both provincial and federal governments — which is expected to come on stream next year..In its own news release, Air Products said the facility “will make Edmonton the centre of western Canada’s hydrogen economy and set the stage for Air Products to operate one of the most competitive and lowest-carbon-intensity hydrogen networks in the world.”.Imperial was equally sanguine. In a boiler plate statement, Brad Corson, Imperial’s chairman, president and chief executive officer said: “Imperial supports Canada’s vision for a lower-emission future, and we are making strategic investments to reduce greenhouse gas emissions from our own operations and to help customers in vital sectors of the economy reduce their emissions.”.Imperial, Canada’s largest and oldest integrated oil major, is 70% owned by Irving, Texas-based ExxonMobil. If approved, it would mark the company’s largest Canadian capital investment since the $31-billion Kearl oil sands mine — which is currently producing about 220,000 bpd — was completed in 2013. Imperial also operates Syncrude Canada — which is producing about 350,000 bpd — under a management contract with Exxon..Imperial shares (IMO:TSX) — which only trade in Toronto — were up more than a Loonie on Thursday, to $70.98. Meanwhile, Air Products (APD:NYSE) was up $3.15 USD on the New York Stock Exchange, to $315.20 USD, while Exxon (XOM:NYSE) was up $3.44 USD to $116.65 USD in morning trading.
