The Alberta government is toting a $440-million loan guarantee to build a $2-billion upgrader as part of its Made-in-Alberta plan.

The facility, set in Alberta’s Industrial Heartland, will upgrade 77,500 barrels of diluted oil sands bitumen every day into a medium synthetic crude and an ultra-low sulfuric diesel.

Speaking in Calgary on Tuesday, Premier Rachel Notley said the province signed a letter of intent last week for a loan guarantee to Calgary-based company Value Creation Inc.

“We've said all along that technology must be part of the solution to make energy that's better for the climate, and that's what this does,” she said.

Synthetic crude can flow easier through pipelines. According to Value Creation Inc., the Heartland Upgrader will reduce the need for diluent or thinning agent while increasing pipeline capacity by up to 30 per cent.

"With our proprietary technology we are able to first clean up this very nasty bitumen ... such that we can achieve much lower capital costs, operating costs, energy costs and greenhouse emissions," explained Columba Yeung, chairman and CEO of Value Creation.

Notley said a number of projects applied, but that it was Value Creation’s advanced technology that made it an ideal candidate for funding support.

“As you can imagine we've gone through an excessive amount of due diligence already. There would be much more due diligence that would go on between the letter of intent and the binding agreement being signed.”

The upgrader is expected to create more than 2,000 jobs during its construction phase, and 200 full-time positions once operating in 2022.

When running, the upgrader is expected to reduce greenhouse gas emissions by up to 16 per cent per barrel in comparison to other processes. Notley also said the upgraded bitumen will be more suitable with refineries around the world, thereby driving up its price.

Alberta's official Opposition said there was nothing new in the announcement.

"We agree that Alberta needs to pursue more upgrading, refining and petrochemical developments. The question is how best to achieve that, and we look forward to seeing a complete economic assessment from the NDP," said Prasad Panda, energy critic for the United Conservative Party.

He suggested the problems facing Alberta oil and gas producers will remain unchanged.

"The premier told Albertans that a carbon tax on their daily living would secure so-called social licence for a pipeline. Albertans still have the carbon tax, but not an inch of pipe is in the ground."

Notley said she's unsure of the kind of support the project would receive if another party was elected in the upcoming spring vote.

"When we introduced this program ... at the time the energy critic for the official Opposition referred to the businesses with whom we would be partnering or supporting as folks that were lining up at the trough," Notley said.

“That's not necessarily a good signal, but it's not black and white and I'll leave it to them to speak to it.”

The upgrader site was described as “shovel ready” with already having some foundational infrastructure and design work in place.

With files from The Canadian Press