The Alberta government now owns 50% of the troubled Sturgeon Refinery..Energy Minister Sonya Savage said yesterday the move should free up $2 billion for provincial coffers..“We are taking action to get a better deal for taxpayers and reducing long-term costs. This agreement provides more economic certainty which will benefit Albertans today and into the future. We look forward to our renewed arrangement with the refinery’s operator, the North West Redwater Partnership, in the years to come,” Savage said in a release..Under the deal, the government is transferred a 50% ownership interest in the refinery previously held by North West Refining..The government made the switch after reviewing contracts the Sturgeon Refinery signed with former premier Ed Stelmach’s government in 2011..The Alberta director of the Canadian Taxpayers Federation, Kevin Lacey, wasn’t happy with the deal..“The government is just trying to dig themselves out of bad contracts they signed in the past. We expect our government to run schools, hospitals and keep our taxes low, they should not be involved in the energy business,” Lacey told the Western Standard..“Alberta needs our government to support our energy sector, yes, but it should not be directly involved in the industry. Let the politicians run the government and business people run businesses.”.With the deal, North West Refining will be paid $425 million to forego future tolling revenue and for its 50% equity stake. Canadian Natural Resources Ltd., which owns the other 50% of the refinery, will also be paid $400 million..“This process will not cost taxpayers any additional funds than the government would otherwise be obligated to pay as a toll payer,” said a government release..“Through the agreement, the government is able to capture the value of processing bitumen as both a toll payer and facility owner..“This plan improves the government’s net present value for the refinery by approximately $2 billion over the life of the project. Net present value is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.”.The government said the agreement also frees up $1 billion in cash flow over the next five years because additional cash flow is a result of the restructuring..The agreement includes a 10-year extension of the processing agreement to 2058..“With this optimization, the government has an equal vote in the control of the refinery to which it is the majority toll payer. Canadian Natural will provide operational leadership to North West Redwater Partnership,” said the government..The Sturgeon Refinery is designed to process approximately 79,000 barrels per day of diluted bitumen from Alberta’s oil sands into higher-value products like low-carbon, low-sulphur diesel, vacuum gas oil, diluent and natural gas liquids..It was set to originally cost $5.4 billion but was completed last year at a cost of close to $11 billion..Dave Naylor is the News Editor of the Western Standard.,dnaylor@westernstandardonline.com,.Twitter.com/nobby7694
The Alberta government now owns 50% of the troubled Sturgeon Refinery..Energy Minister Sonya Savage said yesterday the move should free up $2 billion for provincial coffers..“We are taking action to get a better deal for taxpayers and reducing long-term costs. This agreement provides more economic certainty which will benefit Albertans today and into the future. We look forward to our renewed arrangement with the refinery’s operator, the North West Redwater Partnership, in the years to come,” Savage said in a release..Under the deal, the government is transferred a 50% ownership interest in the refinery previously held by North West Refining..The government made the switch after reviewing contracts the Sturgeon Refinery signed with former premier Ed Stelmach’s government in 2011..The Alberta director of the Canadian Taxpayers Federation, Kevin Lacey, wasn’t happy with the deal..“The government is just trying to dig themselves out of bad contracts they signed in the past. We expect our government to run schools, hospitals and keep our taxes low, they should not be involved in the energy business,” Lacey told the Western Standard..“Alberta needs our government to support our energy sector, yes, but it should not be directly involved in the industry. Let the politicians run the government and business people run businesses.”.With the deal, North West Refining will be paid $425 million to forego future tolling revenue and for its 50% equity stake. Canadian Natural Resources Ltd., which owns the other 50% of the refinery, will also be paid $400 million..“This process will not cost taxpayers any additional funds than the government would otherwise be obligated to pay as a toll payer,” said a government release..“Through the agreement, the government is able to capture the value of processing bitumen as both a toll payer and facility owner..“This plan improves the government’s net present value for the refinery by approximately $2 billion over the life of the project. Net present value is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.”.The government said the agreement also frees up $1 billion in cash flow over the next five years because additional cash flow is a result of the restructuring..The agreement includes a 10-year extension of the processing agreement to 2058..“With this optimization, the government has an equal vote in the control of the refinery to which it is the majority toll payer. Canadian Natural will provide operational leadership to North West Redwater Partnership,” said the government..The Sturgeon Refinery is designed to process approximately 79,000 barrels per day of diluted bitumen from Alberta’s oil sands into higher-value products like low-carbon, low-sulphur diesel, vacuum gas oil, diluent and natural gas liquids..It was set to originally cost $5.4 billion but was completed last year at a cost of close to $11 billion..Dave Naylor is the News Editor of the Western Standard.,dnaylor@westernstandardonline.com,.Twitter.com/nobby7694
