Parkland refinery in British Columbia plans to expand production of renewable fuels worth 600 million dollars

A boat travels through the Parkland Burnaby Refinery on Burrard Bay at sunset in Burnaby, British Columbia, on April 17, 2021.Daryl Dick/The Canadian Press

Parkland Corp. is planning. PKI-T for a $600 million construction program at the BC Oil Refinery to expand the facility’s production of renewable fuels and reduce overall carbon intensity.

The refinery in the Vancouver suburb of Burnaby has the capacity to process 55,000 barrels per day of crude oil, but also produces about 1,500 barrels per day of sustainable fuels such as renewable gasoline, which is derived from materials such as vegetable oils and animal fats.

Parkland’s plans call for increasing the facility’s daily renewable fuel production to 5,500 barrels, and building a new wing dedicated to producing an additional 6,500 barrels per day of renewable diesel.

Omar Moggi, a Toronto-based analyst with the Institute for Energy Economics and Financial Analysis, revealed Monday’s company disclosure is the latest in a series of announcements over the past year by energy companies keen to expand production of renewable fuels in Canada.

For example, Tidewater Midstream and Infrastructure Ltd. is planning. To build a new renewable diesel facility at the oil refinery site in Prince George, British Columbia

The Parkland refinery obtains oil from the Trans Mountain pipeline, which runs 1,150 kilometers from the Edmonton region to Burnaby. In 2018, the federal government purchased the pipeline and West Coast terminal from Kinder Morgan Canada Inc. In addition to the company’s plans to expand pipelines.

Continuing construction on the pipeline will add a second line and nearly triple the system’s total capacity to 890,000 bopd by fall 2023.

The Parkland refinery is operating on a limited amount of property and will not take additional oil from the expanded Trans Mountain system, Ryan Krugmer, the company’s vice president in charge of the Burnaby facility, said in an interview Monday. .

Instead, the Burnaby refinery, which supplies Chevron’s petrol stations on British Columbia’s lower mainland, will focus its expansion strategy on processing feedstocks such as canola oil, animal tallow and wood pulp into fuel. She is already receiving some tallow from West Coast Reduction Ltd. Based in Vancouver.

“We will look to decarbonise, and help our customers meet their own low-carbon solutions,” said Mr. Krugmeer.

The British Columbia government will contribute to the refinery expansion through the province’s low-carbon fuel standards compliance credits. These regional incentives can help offset approximately 40 percent of the project’s capital costs.

“These credits are released to us when we meet project milestones,” said Mr. Krugmer.

Calgary-based Parkland expects to make a final investment decision in the second half of 2023. About 1,000 construction jobs will be created if the company pursues the project. It aims to start operations of the new wing in 2026.

One unresolved issue is whether Parkland will also pursue what the industry calls sustainable aviation fuel, a renewable alternative to conventional jet fuel. Parkland is studying the feasibility of doing so, and is in discussions with the federal and British Columbia governments about potential incentives.

Bruce Ralston, British Columbia’s Minister of Energy, Minerals and Low Carbon Innovation, welcomed the Parkland announcement. “Harnessing Parkland’s technical expertise and infrastructure to reduce the environmental impact of our transportation is something we are proud of,” he said.

To reach the low-carbon fuel standard credits, energy suppliers must gradually lower the average carbon intensity of the fuels they supply BC users. Mr. Ralston said the program encourages suppliers to invest in low-carbon alternatives.

Parkland CEO Bob Espy said renewable fuels play an important role in helping to achieve Canada’s climate goals and decarbonization efforts.

The British Columbia government and Parkland estimate that Burnaby’s initiatives will effectively remove 2 million tons of greenhouse gases from the atmosphere annually — the equivalent of taking 700,000 cars off British Columbia’s roads, or a quarter of the province’s passenger cars.

British Columbia Environment Minister George Heyman said in a statement that renewable fuels will be part of the energy transition in the coming years. “Accelerating the production of low-carbon fuels in British Columbia is one of a series of essential actions outlined by CleanBC’s roadmap to 2030 to significantly reduce greenhouse gas emissions, while creating low-carbon economic opportunities for our province,” he added.

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