Shell Proposes $27-Billion Upgrader
By Anonymous
With a total capacity of up to 400,000 barrels a day, to be built in four stages and taking as long two decades to complete, Shell Canada Limited filed for regulatory approval in late July for a second upgrader near Fort Saskatchewan, which could cost as much as $27 billion. Scotford-2 will process bitumen from Shell’s Athabasca Oil Sands Project, Cold Lake and Peace River in-situ oilsands projects as well as third-party suppliers. The existing upgrader, Scotford-1, is a joint venture owned by AOSP partners Shell, Chevron Canada Limited (20%) and Western Oil Sands Inc. (20%), but Scotford- 2 will be wholly owned by Shell.
The same residue hydro-conversion upgrading technology will be utilized at both upgraders. Scotford-2, to be built in increments of 100,000 b/d capacity, will include a sulphur management facility for handling the expected sulphur production, and solvent de-asphalting of the unconverted residue from upgrading facilities and gasification of asphaltenes to generate hydrogen for upgrading use.
Production from the upgrader will be marketed largely to refiners in the United States, in PADD II (the Midwest), PADD III (the Gulf Coast) and PADD V (the West Coast). “These markets are robust and large enough to absorb the new crude oil volumes expected from the future upgrading facilities,” the company said. “The PADD II market is already an established market for Western Canadian crude oil. As transportation infrastructure develops further, opportunities to supply offshore markets, including the Far East, might become available.”
With regulatory and Shell’s final approval, construction of the first phase could start in 2009 and begin processing in 2012. The timeline for the remaining three phases will depend on various regulatory, project and market factors.
Scotford-2 will be designed to recover 99.8% of sulphur produced and capture carbon dioxide for sequestration in an attempt to reduce greenhouse gas effects on climate change.
The planned development is expected to create about 1,400 long- term operational jobs once all phases are complete. Shell plans to operate each phase of the project for more than 30 years.
In other company news, Shell is ramping up the first phase of its Orion bitumen project in northwestern Alberta, about 30 kilometres from Cold Lake. The company acquired Orion as part of its acquisition of BlackRock Ventures Inc. in 2006. Shell expects to have steam in the first well pad in August 2007 then production a few weeks after that.
The wells will recover bitumen more than 400 metres below the surface. Drilling of five well pads with a total of 20 producer wells (four well pairs per pad) started in December 2006. Pipelines will connect the well pads to the central production facility. Start- up of each well pad will be phased over several months. Shell anticipates the last of the well pads will start up by early 2008. Each pad will produce about 2,000 b/d of bitumen.
Scotford-2 will be designed to recover 99.8% of sulphur produced and capture carbon dioxide for sequestration in an attempt to reduce greenhouse gas effects on climate change. Photo courtesy of Shell Canada.
Copyright Northern Star Communications Ltd. Jul/Aug 2007
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