CALGARY — Aux Sable Canada LP, a joint venture of Enbridge (TSX:ENB) and Fort Chicago Energy Partners (TSX:FCE.UN), has signed a long-term gas processing agreement with Shell Canada Products.
The deal, announced Tuesday, secures a new feedstock source for Aux Sable's Heartland plant in Fort Saskatchewan, northeast of Edmonton.
The plant was originally designed to process offgas — waste or exhaust gas from chemical reactions — from the nearby BA Energy oilsands refinery upgrader, which stopped construction in 2008.
"The agreement with Shell is consistent with our strategy to be a leader in the processing of upgrader and refinery offgas in Alberta," said Bill McAdam, president and CEO of Aux Sable Canada.
The plant, owned and operated by Aux Sable Canada, will be licensed to process up to 20 million cubic feet per day of offgas and will produce hydrogen, ethane and a propane-plus mix.
All of the products form the plant will be delivered to Shell's nearby Scotford refinery via pipeline, the company said.
Aux Sable expects the plant to be operating in the summer of 2011.
The gas and liquids company said processing refinery or bitumen upgrader offgas helps cut greenhouse gas emissions and expands the use of ethane as a feedstock to Alberta's petrochemical sector.
"Offgas has the potential to be a growing source of new feedstock supply for Alberta's petrochemical industry," said Tim Stauft, Au Sable's executive vice-president.
"Aux Sable will be the first company in Alberta to extract ethane and hydrogen from a refinery or upgrader offgas stream."