Alberta Premier Rachel Notley said on Tuesday that it would provide a C$440 million ($330 million) loan guarantee for a planned C$2 billion ($1.5 billion) oil partial upgrading facility, aiming to push more crude through its full pipelines.
Notley said her government had signed a letter of intent for the loan guarantee to private company Value Creation Inc , which intends to make a final investment decision by year-end on building the facility, near Edmonton.
The move is one of a series of steps the left-wing New Democratic Party has announced to clear chronic bottlenecks of Alberta’s oil production, which has expanded faster than pipeline capacity. Notley’s government, which faces an election this spring, has also ordered mandatory curtailments to clear a storage glut and said it planned to buy trains to move more oil.
Record-large discounts on prices for the province’s heavy oil last year, mainly the result of problems shipping it, have shrunk profits for many oil producers and damaged the Canadian economy.