2009 Bitumen royalty-in-kind Request for Proposals process

Release of RFPs

  • On July 21, 2009 Alberta Energy issued an initial Request for Proposal (RFP) soliciting applications in using Bitumen royalty-in-kind (BRIK) on the Alberta Purchasing Connection website (reference numbers AB-2009-03118 to AB-2009-03120, closed August 21, 2009).
  • On October 19, 2009 Alberta Energy issued a Final Amended RFP soliciting applications in using BRIK on the Alberta Purchasing Connection website (reference number AB- 2009-03116, closed January 27, 2010).
    With these RFPs the Department intends to retain consultants to assist the Department for the purpose of providing such expert analysis and other services as may be required.

Approach
The RFP focussed on a value-added facility located preferably in the Industrial Heartland Area of Alberta.
Rationale:

  • Stimulate value-added processing in the province and obtain the best value for the government from its bitumen and potential products as directed by the Provincial Energy and Oil Sands strategies.

  • The industrial heartland will be a preferred location under the first BRIK RFP to leverage existing infrastructure and local synergy.

  • Companies outside Alberta have recently indicated an interest in using the royalty barrels as part of an entry strategy for investments in Alberta around upgrading, refining and gasification.

  • There are market opportunities for synthetic crude oil, diesel, refined products and polypropylene.

  • The municipalities in the Capital Region are attempting to attract heavy industry to the region and a chemical cluster is forming.

    The provision of BRIK volumes to specific RFP winners is focused on security of supply for those projects, and will be based on firms paying a market price for the bitumen. BRIK is not a method to provide subsidized bitumen. The Crown may be requested to enter into commercial custom processing arrangements to have its BRIK volumes processed within a privately owned upgrader.

Fairness Monitor

  • A Fairness Monitor, Mr. Gary Campbell of GGC Consultants Inc., was established to monitor and report on fairness of the process specified in the RFP. They provided oversight over all procedures undertaken to evaluate and selected wining proposals.
  • The role of the Fairness Monitor was to monitor and report on the fairness, as defined by the following criteria, of the RFP process:

    • Did the Government of Alberta (the “GOA”) follow the process specified in the RFP and any addenda issued thereto?
    • Were any addenda to the RFP issued for reasons consistent with the stated objectives of the RFP and in accordance with the process for addenda specified in the RFP?
    • Did the GOA carry out the evaluation and selection process contemplated by the RFP honestly in good faith, in accordance with and based on the criteria in the RFP and any addenda, without bias, and without conflict of interest on the part of any individual participating in the evaluation process?
  • Specific Activities

    • become familiar with the RFP and, if issued, any addenda;
    • monitor generally the evaluation and selection process arising from the RFP;
    • monitor all written communications between the GOA and proponents in relation to the RFP;
      attend meetings (including teleconferences and videoconferences) between the GOA and one or more proponents;
    • observe and monitor meetings of the Evaluation Team; and
    • in the discretion of the Fairness Monitor, observe and monitor technical meetings pertinent to the selection process or the function of the Evaluation Team.

Review of RFP Applicants

  • A Government of Alberta cross ministry committee reviewed all the applicants in accordance with the criteria established within the RFP. The committee provided recommendations to the Minister of Energy for final approval of successful applicants. In July 2009, the Alberta government announced that it would begin negotiations with the successful applicant North West Upgrading Inc. 

In 2008 a Request for Expression of Interest was issued, it was not a pre-requisite for this RFP.

Related 2009 documents;