Suncor Energy to supply diluent for oil sands project


By OGJ Online Correspondent


CALGARY, Mar. 16
--Petro-Canada and Suncor Energy Marketing Inc. (SEMI), a unit of Suncor Energy Inc., signed a long-term agreement for SEMI to supply diluent for the Petro-Canada MacKay River oil sands project under construction.

Heavy bitumen from the project in northern Alberta will be blended with diluent to enable the product to be shipped via existing pipelines to North American markets.

The supply agreement for diluent begins in late 2002 when Petro-Canada plans to start production of 30,000 b/d of bitumen to be mixed with up to 30,000 bbl of diluent.

Pricing will vary according to market conditions, but details of the contract were not released.

The blending will be done at the Gateway Terminal, the northern terminus of the Athabasca Pipeline, about 22 miles from MacKay River. Bitumen will be shipped to the Gateway Terminal by an insulated lateral pipeline.

�With a secure supply of diluent, we have now ensured our ability to ship the production from MacKay River and sell it competitively into North American markets,� said Brant Sangster, Petro-Canada vice-president of oil sand operations. �It�s an important milestone in preparing for production in 2002, and avoids the necessity of building additional pipelines to bring diluent supplies to the Fort McMurray area.�

Richard Brown, president of SEMI, said the sales agreement supports Suncor�s growth plan and illustrates the strong demand and diverse customer base for Suncor�s broad range of products.

Parent Suncor also operates a major oil sands plant in the area.

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