Shell oil sands expansion now on-stream

Shell, as operator of the Athabasca Oil Sands Project (AOSP), today announced the successful start of production of a 100,000 barrels per day expansion of its oil sands operations in Canada. The new Jackpine Mine will combine with existing production from the Muskeg River Mine to feed the Scotford Upgrader, which processes the oil sands bitumen – heavy oil – for refined oil products. Construction for an expansion of the Scotford Upgrader is underway, and will come on-stream in 2011.

“The Jackpine Mine is a tremendous addition to our oil sands portfolio,” said Marvin Odum, Shell Upstream Americas Director and President of Shell Oil Company.

The Jackpine Mine adds capacity of 100,000 barrels of oil equivalent (boe) per day to the existing Muskeg River Mine capacity of 155,000 boe per day. Once the Upgrader expansion is online early next year production will rise towards capacity over 2011.

This AOSP expansion is one of a sequence of major projects that should raise Shell’s global oil & gas production by 11% over the 2009 - 2012 period.

The construction of the Jackpine Mine in northern Alberta took around five years, with more than 6,500 employees and contractors involved on site at its peak. With some 255,000 barrels per day of capacity now in hand, next steps will include the efficiency improvements that can come from integrating and operating these assets together, with incremental growth potential from debottlenecking investment.

Odum continued: “Canada’s oil sands are an important source of energy in a world with increasing energy needs. Shell is committed to developing this resource responsibly and to pursuing opportunities to reduce the impacts of our oil sands operations. To reduce the CO2 footprint of our oil sands operations, we are continuing to advance our proposed carbon capture and storage project, Quest, which could capture and store underground some 1 million tonnes of CO2 per year from the Scotford Upgrader.”

Shell Canada Energy is 60% owner and operator of the Athabasca Oil Sands Project (AOSP) along with Chevron Canada Limited (20%) and Marathon Oil Corporation (20%). AOSP includes the Muskeg River Mine, Jackpine Mine and Scotford Upgrader.
Jackpine Mine fast facts

* Adds 100,000 boe/d total capacity and brings AOSP total capacity to 255,000 boe/d.
* More than 650 Engineers based in Calgary designed the facilities.
* More than 34,000 different people worked at the construction site over the nearly five years of construction, amounting to some 30 million man-hours.
* Over the course of construction the skilled professionals who worked on the project included:
o 3,500 electricians
o 1,700 ironworkers
o 2,000 pipefitters
o 1,200 welders
* Apprentices made up over 40% of the workforce, which helps to build local skills.
* Some 30% of the workforce was female.
* Around 300 contracts were awarded.
* To support the expansion, an onsite 2,500-person hotel-style accommodation was constructed to reduce traffic and other demands on local services, in addition to attracting and retaining skilled workers to the project.
* An adjacent airstrip to transport workers, equipment and supplies opened in November 2007.
* Commodities used included:
o ~ 70,000 cubic metres concrete,
o ~ 30,000 tonnes steel,
o ~ 190,000 metres pipe,
o ~ 2.5 million metres cable.

More information on Quest is available at www.shell.ca/quest


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