Shell’s Athabasca Oil Sands Project achieves fully integrated operation

Petroleum News Staff

Shell Canada said it achieved fully integrated operation on April 19 from its Athabasca Oil Sands Project when the newly repaired Scotford upgrader successfully started processing bitumen from the Muskeg River mine.

If all goes well, production of synthetic crude is expected to peak at 155,000 barrels a day in the third quarter, the company said.

On Jan. 7, a week after it began extracting its first bitumen from a 5-billion-barrel reserve, the northern Alberta project was idled by an early-morning fire and “minor” blasts Jan. 7, a fresh setback to a C$5.7-billion (US$3.6 billion) endeavor that had already been rocked by a series of cost overruns in the neighborhood of 50 percent.

The project entered 2003 with bitumen production from its Muskeg River mine at 50,000 to 60,000 barrels per day and was shipping the oil-laden tarry substance in diluted form to Shell Canada’s upgrader near Edmonton.

The Athabasca Oil Sands Project, which is expected to supply the equivalent of 10 percent of Canada's oil needs, is a joint venture of Shell Canada (60 percent), Chevron Canada (20 percent) and Western Oil Sands (20 percent).