UPDATE 1-Canada's Federated finishes $2.7 bln refinery expansion

Fri Oct 26, 2012 4:47pm EDT
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* Capacity boosted by 45,000 bpd to 145,000

* Fuels to be sold through the co-op retail network

* New equipment will run upgraded oil sands crude

CALGARY, Alberta, Oct 26 (Reuters) - Federated Co-operatives Ltd has completed a C$2.7 billion ($2.72 billion) expansion of its Regina, Saskatchewan, refinery, boosting output at the facility by 45 percent to make it Canada's fourth-largest refinery, officials said on Friday.

The expansion, a process that took seven years, brings total capacity to 145,000 barrels per day, with the gasoline and diesel fuels to be sold at Federated Co-op's retail service stations, bulk fuel outlets and card-lock facilities.

"We see great economic growth taking place across Western Canada, here in Saskatchewan and Regina," Scott Banda, chief executive of member-owned Federated Co-op, told reporters. "To facilitate that growth from our perspective we have made this investment to insure we are in a position for the long term to supply the needs of the growth that we see."

The operation was known as Consumers' Co-operatives Refineries Ltd and is now called the Co-op Refinery Complex.

The initial price for the project was C$1.9 billion, but lagging productivity pushed it higher as the engineering and construction labor force in Western Canada was stretched, Banda said.

In addition, the company underestimated some of the work that would have to be done to revamp parts of the existing refinery units.   Continued...