Residents of Stoughton and area heard more details last week about a proposal to build a 40,000 barrel-per-day oil refinery southwest of the town.
Dominion Energy Processing Group has applications before the provincial government for the development.
If approved, a company official told a townhall meeting on Thursday, they would hope to begin construction this year. "We want to move into execution by February, meaning the TPP, which is the Transitional Proposal Permit, that process will take roughly about 90 days" said Keith Stemler, Chief Executive Officer.
"Once we have those permits in hand, the next step would be to start turning dirt. So this year, in 2017, we'd like to see the rough earth works completed on site, as early as June this year, with a completion date of late 2019." explained Stemler.
Stemler organized the public meeting to share information, and to listen to concerns from local people. He told the meeting the first phase of the project would cost an estimated $600 million, with a total cost of $1 billion by the time all three phases are completed.
Financing has been arranged, contingent on Dominion getting the permits allowing the work to go ahead.
But many other details still have to be finalized, not the least of which is a contract with Crescent Point for a supply of crude oil.
Although Dominion has already purchased land adjacent to Crescent Point's gas processing plant, an agreement has yet to be worked out.
Stemler and his company are banking on completing a deal which would benefit both companies. "There's a potential feedstock from CP (Crescent Point) because there's a gas plant there." said Stemler. "That material would come pre-stripped, meaning that the propanes are taken out of it, the butanes are taken out of it, so it's ready to be refined."
And there would be other benefits. ""Right now, they are flaring gas." said Stemler. "We're going to take that flare gas, and we're going to re-use it. We're going to take their carbon emission and re-use that. So instead of going and purchasing all this product, we're going to utilize what they are not. So that was one of the big driving forces, beside the feed stock."
Stemler added that the refinery would include an 85 megawatt power generating facility fuelled by product from Crescent Point, which could be shared by both operations, and which would relieve pressure on Sask Power.
Another reason for choosing that particular location is the land itself. "We looked at different things geotechnically." said Stemler. "We looked at where global stability is in the province. This area here, global stability is very good to house high equipment."
Water is a big factor, as well, said Stemler, in response to a question from the audience.
The refinery will include a reservoir measuring 300 metres by 300 metres, and 8 feet deep, and will contain 450 thousand cubic metres of water.
According to Stemler, the company is currently negotiating with the SaskWater for access to one of two sources, either Rafferty or the Moose Mountain reservoir north of Stoughton. He says they prefer Moose Mountain because it is closer, and the water there is clearer, and better suited to their refining requirements.
If an agreement is reached, Dominion would pay SaskWater approximately $16 million to bring water in by pipeline from Moose Mountain.
Yet another reason for the Stoughton location, said Stemler, is access to a rail line."The spur line is a mile and a quarter north. We have lines that run to the trans-load at that location." he said. The rail location on the outskirts of Stoughton already serves as a major loading point for Crescent Point crude.
The issue of safety was raised by several people at the meeting.
Stemler told the crowd that safety is also his primary concern, but at least one resident, Shannon Fenn, remained skeptical. She accused Crescent Point of being too slow to contact area residents when a small fire broke out two days earlier, and wanted assurances that Domion would have safety protocols in place.
Another resident, Valery Creighton, also expressed concerns, while at the same time supporting the project. "The plant is really good economic opportunity for the community and the area, no question about that." Creighton told Discover Weyburn following the meeting. "Obviously, as you heard from all the residents today, the concerns, as we've all lived in the Bakken oilfield play for numerous years now, is just how will the safety requirements be met." she added.
Transportation of refined product from the refinery was also an issue for some at the meeting. While appearing to lean toward rail, Stemler said they hadn't yet worked out details of whether the gasoline, diesel fuel, and other products would be shipped by rail, truck, or a combination.
Randy Philipps expressed concern about shipping highly volatile fuels. "You can have all the safety regulations you want to have on that plant, and I believe you will." Phillips told Stemler. "But the minute it goes out of your hands into somebody else's, and that's still local, there's other problems show up on the door."
"In the light of what everybody in this room is going to look at, at the end of that, it's going to come back to your door, and they're going to say, would we have had this problem if we had never seen you?" Phillips added.
Stemler agreed, and said he will insist that all contractors and employees adhere to stringent safety regulations. Or, he stated plainly, they would be fired.
Other refinery details:
- Site would include 2 foam fire trucks valued at $1 million each, available, if needed, for the community.
- Would create more than fuels; future phase would manufacture plastics used in products such as vehicle dashboards
- Aim is to build most technologally-advanced refinery in North America, with big emphasis on 'green' energy
- Plant would be small enough to avoid federal 'Carbon Tax' requirements
- Job creation aimed at locals: Several hundred for construction, 60 full time once plant is operating
- 'Indirect' benefits including need for more restaurants, housing, mechanical repair, etc.
- Community involvement, including sports teams sponsorships, etc.
In a later interview with Discover Weyburn, Stemler emphasized everything is still in the proposal stage. They need the necessary government approval and permits to go ahead.