Imperial Oil (IMO.TO)(IMO) says it will invest $720 million to advance its Strathcona renewable diesel facility near Edmonton.
The Calgary-based company has touted the project as the largest of its kind in Canada, aiming to produce more than one billion litres per year, or 20,000 barrels per day, of renewable diesel. Imperial says the fuel has the potential to eliminate about three million tonnes of emissions per year, compared to conventional fuels.
Imperial projects renewable diesel production will begin in 2025. The company says hydrogen and biofeedstock will be combined with a proprietary catalyst to produce premium lower-carbon diesel fuel. The project was first announced in August 2021.
Last year, Imperial said a final investment decision for the renewable diesel facility was expected in the coming months, based on factors including government support and approvals, market conditions and economic competitiveness. The company said on Thursday that regulators are expected to approve the project “in the near term.”
“Imperial supports Canada’s vision for a lower-emission future, and we are making strategic investments to reduce greenhouse gas emissions from our own operations and to help customers in vital sectors of the economy reduce their emissions,” CEO and president Brad Corson said in a news release on Thursday.
In September, Imperial announced a long-term contract with Air Products and Chemicals (APD ) to supply low-carbon hydrogen for the proposed renewable diesel complex. The company says it is looking for third parties for bio-feedstock supply needed to produce renewable diesel fuel.
Imperial says a significant portion of the renewable diesel from Strathcona will be supplied to British Columbia in support of the province’s plan to lower carbon emissions.
Imperial has laid out goals to reduce its greenhouse gas intensity by 30 per cent by 2030 and reach net-zero in the company’s oilsands operations by 2050. The company says it plans to use renewable diesel in its operations to reduce emissions.
Imperial will report fourth-quarter 2022 financial results on Jan. 31.
Toronto-listed shares added 1.75 per cent to $71.00 as at 11:07 a.m. ET Thursday. The stock has added about 38 per cent over the last 12 months.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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