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Canada’s Athabasca oil sands project a ‘go,’ say partners Shell, Chevron and Western Oil It is expected to create more than 4,000 construction jobs and add more than C$2 billion to Alberta’s gross domestic product during construction Petroleum News Alaska
A C$3.5 billion Athabasca oil sands project has been approved, partners Shell Canada Ltd., Chevron Canada Resources Ltd. and Western Oil Sands Inc. said Dec. 7.
Construction will begin immediately with production planned for late 2002. Under a joint venture agreement, Shell Canada retains a 60 percent interest in the project; Chevron and Western each hold 20 percent interests.
The Athabasca oil sands project joint venture includes:
• The C$1.8 billion Muskeg River mine, to be constructed north of Fort McMurray, Alberta. Trucks and shovels will excavate the oil sands; advanced extraction technologies will separate the bitumen from the sands. Production is expected to be 155,000 barrels per day of bitumen.
• The C$1.7 billion Scotford upgrader to be constructed next to Shell’s existing Scotford refinery north of Fort Saskatchewan, Alberta. The upgrader will use hydrogen-addition technology to process the bitumen from the Muskeg River Mine into a range of premium, synthetic crude oils.
30-year project life expected The project will produce synthetic crude oil and is expected to create more than 4,000 construction jobs and add more than C$2 billion to Alberta’s gross domestic product during construction.
Over the 30-year life of the project, approximately 1,000 permanent positions will be created and more than C$5 billion contributed to all levels of government in the form of taxes and royalties.
Tim Faithfull, Shell Canada’s president and CEO said: “It will be the largest capital investment Shell Canada has ever made — in a growth business that will more than double our liquids production.”
Jim Simpson, president of Chevron Canada Resources said, “The Athabasca Oil Sands project … provides access to a secure long-term supply of high quality, synthetic oil and positions Chevron to take advantage of future expansion in the area. “
In addition to its joint venture investment of C$2.1 billion, Shell Canada will invest approximately $400 million to modify its existing Scotford refinery to utilize the new synthetic crude oils produced by the Scotford upgrader.
A number of companies will construct new facilities connected with the project under long-term commercial agreements, including: the Corridor Pipeline which will transport diluted bitumen from the Muskeg River mine to the Scotford upgrader, and connect the upgrader with refinery and pipeline terminals in the Edmonton area; Corridor will also provide oil storage facilities. The ATCO Power Canada Limited Muskeg River Mine gas-fired cogeneration plant, which will provide steam and electricity to meet the needs of the Muskeg River Mine, as well as additional electricity for Alberta consumers.
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