The Sturgeon Upgrader is one of four components of the greenfield Fort Hills Project, an integrated oil sands mining and upgrading development near Fort McMurray, Alberta. According to project operator Petro-Canada, Fort Hills is one the largest remaining undeveloped oil sands leases in the Athabasca oil sands region with an estimated 4 billion barrels of recoverable bitumen. Several oil sands leases--owned either individually or jointly by partners Petro-Canada, UTS Energy Corp., and Tech Cominco, Ltd.--are near the proposed site. Fort Hills will comprise the following: pipeline and storage facilities for receipt of bitumen and shipment of projects; an upgrader to process bitumen; by-product handling facilities, including rail loading equipment; and administrative, support, and laboratory facilities.

After receiving diluted bitumen produced at Fort Hills and shipped via pipeline or produced elsewhere and stored onsite, the Sturgeon Upgrader will upgrade the bitumen by removing carbon and adding hydrogen. The process will yield sweet synthetic crude products. A second pipeline will return recovered diluent to the bitumen production sites. The facility, which would be built approximately 24 miles northeast of Edmonton, also will feature hydrogen manufacturing and sulfur recovery units.

According to Petro-Canada, the estimated CDN$15.2-billion project should be economical at crude prices above US$40 a barrel.

In a Second Quarter 2008 investor presentation, UTS said the first phase of the upgrader would process 140,000 b/d of synthetic crude oil and value added products. The second phase would raise capacity up to 280,000. The Fort Hills Partnership has also explored the possibility of raising the upgrader's capacity to 350,000-400,000 b/d at some point. The project would support approximately 24,000 person-years of direct construction employment and roughly 500 permanent employment opportunities.

The project partners in December 2008 decided to defer the project until oil prices and the world economic situation improve. In January 2009, Alberta's Energy Resources Conservation Board approved the project provided the Fort Hills partners meet 13 conditions. One of the conditions calls on the partners to commit to the board by Dec. 31, 2010, that the project will proceed.

On late-Jan. 2009, French major Total S.A. launched a public offer to acquire all the issued and outstanding shares of UTS. The move would consolidate Total's portfolio in the Athabasca region. UTS announced shortly after Total's announcement that it was reviewing the unsolicited takeover bid.