Incitec Pivot Ltd T.IPL

RE:RE:RE:Alberta at its best

[Dapper1]

I'd be careful about including abundance of fresh water.  Alberta is dry land and has very little excess water for use in new upgrader/refineries.  The Athabasaca is totally used as we speak and not a drop extra exists.  The North Sask is primarily reserved for municipal use and growth...very little extra for industry. Upgraders and refiining of heavy oil requires huge amounts of make-up water for use as cooling water and hydrogen production.  You can replace most of the cooling water demand with Air Cooling, but that increases Capex by about 30%. So you increase the cost of a middle sized upgrader/refinery from a nominal $15B to $20B.  This deacreases the ROI fron a minimum acceptable of 15% to a high risk 10%.  There is only one river in Alberta which can support large scale upgrading/refining and that is the Peace River. However this requires a costly P/L to and from.  I would always state in my studies of new upgrader/refining projects, that make sure you have sufficient fresh water  souces available and can get an envoronmental permit for it. Pehaps this will eventually fit in with the Nortern Gateway P/L corridor.