October 26, 2012 / 8:48 PM / 5 years ago

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

* 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.

The new capacity will be fed by sweet synthetic crude produced at Alberta oil sands operations, including Syncrude Canada Ltd, Suncor Energy Inc and others, said Bud Van Iderstine, vice-president of refining operations.

The co-op will sign shorter-term contracts for some of its crude needs, and does not need to secure long-term deals to backstop the project, Van Iderstine said.

“With sweet, upgraded crude, it is readily available on the market,” he said.

Federated Co-op runs 380 gas bars, 313 cardlock and 140 bulk fuel locations across Western Canada.

Canada’s largest refinery is the Irving Oil Ltd plant in Saint John, New Brunswick, at 300,000 bpd, followed by the 265,000 bpd Valero Energy Corp refinery in Quebec City, and the 187,000 bpd Imperial Oil Ltd plant at Strathcona, near Edmonton, Alberta.

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