Suncor Inc., Calgary, has disclosed plans for a $2.2 billion (Canadian) expansion of its oilsands operation near Fort McMurray, Alta.
The expansion, dubbed Project Millennium, will more than double production to 210,000 b/d from 85,000 b/d by 2002 and will duplicate existing extraction and production facilities.
This latest project, plus a $600 million expansion now under way, will increase Suncor's spending in this area to $2.8 billion. The current expansion will increase production to 105,000 b/d by 1999.
The company says it expects its cash production costs to drop to $10-11/bbl by 2002 from a current $15/bbl. It predicts a 15% return on investment because of falling production costs.
Meanwhile, Shell Canada Ltd., Calgary, plans to lay a $518 million (Canadian) pipeline from a new oilsands project in the Fort McMurray region to Edmonton.
Suncor expansion
The first phase of Millennium is a $190 million investment in the existing plant, to begin immediately, which will increase production to about 130,000 b/d by 2001.
Construction on the second phase will begin in 1999, subject to board and regulatory approvals.
Suncor is planning a $90 million technical, environmental, and socioeconomic assessment now as a prelude to Millennium's second phase.
Suncor says it expects to find markets for its increased production because its oilsands product is upgraded into light crude products that can be tailored to meet the needs of most refiners in North America.
The company recently disclosed an agreement to sell 30,000 b/d of heavy oil to Koch Oil Co. Ltd. and a deal with IPL Energy Inc., Calgary, to use a planned pipeline from Fort McMurray to a mainline pipeline terminal at Hardisty, Alta. (OGJ, Aug. 4, 1997, p. 34). Suncor is also spending $242 million in the initial phase of its Stuart shale oil project in Australia, which it says could become a $2.5 billion commercial operation.
New pipeline
Shell Canada's proposed 311-mile Corridor pipeline would have capacity of 200,000 b/d of undiluted bitumen and return 60,000 b/d of gas/condensate. A new mining and extraction plant will have capacity of 120,000-150,000 b/d of bitumen. Shell is considering an upgrader for bitumen at its Scotford refinery near Fort Saskatchewan.
Construction on the Corridor pipeline would begin in 2000 with completion in 2002.
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