Abstract

In the late 1970's Consumers I Co-operative Refineries Ltd. recognized that future light crude oil supply would become depleted necessitating the need to obtain alternate sources. When the Plaines Consortium considered an alternate approach to the "Standalone" project, the refinery was eager to join the group. The plan was to integrate upgrading facilities with the refinery and maximize the use of existing processing facilities.

Initial studies indicated this could be a viable approach. The results of these studies were presented to both levels of government and the ultimate result was an agreement to investigate the technical and economic feasibility and should the results of this in depth study be favourable, the decision to proceed to the construction stage would be given.

The results of the Phase I work indicated that both the technical and economic aspects of the project are feasible and an agreement between Consumers' Co-operative Refineries, Government of Saskatchewan, and Government of Canada, to build the facility was announced on September 3.

The project is scheduled for completion in mid 1988 at an overall cost of approximately $600 million dollars.

Introduction

During the late 1970's there was an extremely high demand for petroleum products resulting in refineries operating at capacity to meet the requirement. Concern arose over the ongoing availability of light crude oil reserves and it became apparent that to continue to make available the petroleum products required, the utilization of the heavier, more sulphurous crude oils must be considered.

Saskatchewan has large untapped supplies of such crude primarily located in the Southwest (Foster ton-Dollard) and Northwest (Lloydminster) regions of the Province. Other than the processing to manufacture small quantities of asphalt, there is no refining capability for this crude oil in Canada. This required the crude to be exported, which because of artificially low differential prices between light and heavy crude oils, created a very unstable market.

It was to meet this challenge that the Plaines Upgrader concept came into being. This was a consortium of oil producing companies formed to investigate the upgrading of Saskatchewan medium sour and heavy sour crude oils. For a number of reasons, including the substantial cost or the stand alone facilities this project did not appear attractive to the sponsors.

As various members of the consortium withdrew from the project, the Co-op Refinery at Regina became involved with the remaining members to study the possibility of integrating the upgrading facilities with existing refinery processing units. This would provide a substantial cost reduction greatly improving the economic viability of the project. Over a period of several months the parties changed and ultimately negotiations proceeded with Consumers' Co-operative Refineries, the Government of Saskatchewan, and the Government of Canada.

At this point I would like to digress for a moment and say a few words about the Co-op Refinery. The Refinery celebrated its 50th anniversary last year, a half century of continual growth and successful operation.

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