Kevin Laliberte,
Smoky River Express

Peace River Oil Inc. Bluesky project just got a little bit bigger in size and value. The Red Deer-based company announced late last week that the proposed refinery (located just south of McLennan at Kathleen) is poised to double in size, an end result which will increase overall capacity for phase one of the project to 50,000 BPD (barrels per day), up from an original goal of 25,000 BPD. In accordance, capital costs for the project are now estimated at staggering $2.5-billion, up from the original estimate last year of $1.4-billion. The change is a direct result of continued momentum towards the oil upgrader project, proposed at the company’s existing plant site. Don Allan, president and chief executive officer for Peace River Oil Inc. says long-range targets for the Bluesky plant, which will be built in four distinct phases, have also doubled to an eventual planned output of approximately 200,000 BPD. “The interest we’ve seen in the project has thus far exceeded initial expectations, and combined with the economies of scale, the increase just makes sense,” says Allan. “A larger scale project of this nature reduces our cost per barrel and allows us to offer an enhanced slate of higher value refined products,” he adds. “It provides more flexibility to clients, and is more attractive to investors.” The enhanced economics associated with construction of a larger scale facility also make it more practical and attractive to companies looking at investment opportunities in new bitumen markets. Rob Gray, the company’s senior corporate relations advisor says the decision by Peace River Oil Inc. To expand its horizons is definitely, “turning some heads.” “The scale of a 50,000 BPD facility has really captured the attention of our stakeholders. We are thrilled at this progress because it means additional choice for our customers, higher returns for investors, and more opportunities for the local community,” Gray explains. The increase is made possible in part by the company’s recent decision to establish an Exploration and Production subsidiary. The focus of the new entity will be to augment the supply of bitumen feedstock to the Bluesky project. Peace River Oil Inc. is a privately held company built around a sharply focused vision of increasing bitumen production in one of Canada’s largest oil sands reserves to help meet the worlds’ growing energy needs. With phase one targeted for completion in 2011, the Bluesky project will feature the first new North American refinery to be constructed in more than two decades. The plant will produce both ultra low sulphur diesel and gasoline.

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