Alberta seeks processors for its royalty bitumen

CALGARY, Alberta, July 21 (Reuters) - The Alberta government is seeking bids to process bitumen it receives as in-kind royalty payments as a way to bolster upgrading of the tar-like crude from the province's vast oil sands reserves, it said on Tuesday.

The government of Premier Ed Stelmach wants to stimulate bitumen processing to boost economic activity and create jobs as part of a long-term energy strategy.

Some oil sands developers have forgone building multibillion-dollar upgrading plants with their projects, opting instead to ship the raw resource directly to U.S. refineries that have the equipment to process it.

Upgraders turn the extra-heavy crude wrung from the oil sands into synthetic oil, which refineries use as feedstock to make gasoline and other petroleum products.

As part of the program, Alberta will agree to supply an upgrader with up to 75,000 barrels a day of royalty-in-kind bitumen. It is not extending the offer to operations that both produce and upgrade oil sands-derived oil, it said.

The deadline for proposals is Dec. 2. (Reporting by Jeffrey Jones; editing by Rob Wilson)