Alberta's energy regulator said on Tuesday it approved Petro-Canada's plans for an oil sands processing plant near Edmonton that the company has already deferred due to low oil prices and the financial meltdown.

The Energy Resources Conservation Board said it imposed 13 conditions, many environmental, along with its approval for the upgrader, which would process bitumen from Petro-Canada's proposed Fort Hills oil sands project into refinery-ready synthetic oil.

The conditions include the company making a commitment to the board by Dec. 31, 2010, that the multibillion-dollar plant will proceed.

"The rationale for that is we require some certainty," board spokesman Darin Barter said. "There could be changes in regulations, changes in landowner concerns in the area, changes in government policy, so we need to make sure this approval is going to meet the standards that are in place."

Petro-Canada and its Fort Hills partners, Teck Cominco Ltd and UTS Energy Corp, said in November that they were pushing back their decision on whether to go ahead with the huge project.

They also said they would forgo the upgrader -- which would be located in the Sturgeon County, Alberta, area -- for the first phase of the development in an effort to save as much as C$10 billion ($7.9 billion).

Fort Hills is just one of numerous oil sands projects that have been put on hold after oil prices fell by more than $100 a barrel from a July record of more than $147 and global credit markets froze.

Suncor Energy Inc said on Tuesday it was halting working on its C$20.6 billion oil sands expansion until conditions improve.

Among other conditions of the approval, Petro-Canada must conduct a full-scale emergency response exercise before start-up, achieve a 99.5 percent sulfur recovery rate within six months of start-up and submit a noise survey within three months.

($1=$1.27 Canadian)

(C) 2009 Xinhua Financial News. All Rights Reserved