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The Sturgeon plant, Canada’s first new refinery since 1984, will begin turning oilsands bitumen into diesel by the end of the year, according to Ian MacGregor, chairman of Northwest Redwater Partnership, which owns half the project in partnership with Canadian Natural Resource Ltd. Bitumen is a molasses-like substance extracted from oil sand that is so thick, it has to be blended with condensate or upgraded into synthetic oil to be processed.

Near Supply

Located southwest of Alberta’s oilsands, home to the world’s third-largest crude reserves, Sturgeon is about 90 percent built, with bitumen scheduled to be injected into the plant by the end of summer, MacGregor said. It will process 80,000 barrels a day of diluted bitumen at the end of its first phase, scheduled for completion this year.

The Alberta Petroleum Marketing Commission, an agent of the provincial government, will provide 75 percent of the feedstock used by the $8.5 billionrefinery, or about 37,500 barrels a day, along with loans, equity and fees, according to government documents published last year, which estimated the total package at about $25 billion over 30 years.

That much bitumen alone is worth about $20 billion at the current market price of about $48 a barrel, according to Bloomberg calculations. Oilsands producers supply the bitumen as a royalty payment to the province.

Changing Market

The diesel market that the refinery will supply has also changed radically in the years since the project got off the drawing board, with swelling quantities of the trucking fuel. The surplus of diesel produced by Alberta refineries in the 12 months through January was 45 percent bigger than in the same period three years before, the latest government figures show.