As 2,500 workers made a start on up to $12.8 billion in plant additions, Alberta's youngest oilsands mega-producer Wednesday embarked on even bigger growth.
The Athabasca Oil Sands Project unveiled a six-year construction program to erect four more Edmonton-area bitumen upgraders, expand a Fort McMurray, Alta., mine and open up a new pit. Also under study is a new Ontario upgrader and refinery in Sarnia.
The additions come on top of the three-year-old project's first Scotford upgrader five kilometres east of Fort Saskatchewan, Alta., a second processing plant now entering construction next door and expansion already underway at Athabasca's mines 70 kilometres north of Fort McMurray.
The plan increases to 12 the number of projects in Edmonton's $30-billion-plus bitumen upgrader lineup. Athabasca aims to build four new plants producing 100,000 barrels per day each in order to process all of its low-grade bitumen output into premium refinery-ready oil, Shell Canada president Clive Mather said.
Each mine and upgrader piece of the plan requires 3,000 to 4,000 workers to build. Simultaneous Edmonton and Fort McMurray construction is expected to employ a total of up to 8,000 skilled trades personnel during activity peaks. Cost estimates were under review and not disclosed. But the project's 60 percent lead owner, Shell Canada, raised its production target to 770,000 barrels a day from its former 500,000 barrels daily.
``You can go faster and go cheaper,'' Mather said in an interview.
The new plan calls for uninterrupted construction until the mammoth oilsands operation grows to its full potential, he said.
The program will weld project managers, engineers and workers into a team that will only have to be recruited once and will become more efficient as the development gains momentum, Mather predicted. Athabasca minority partners Western Oil Sands and Chevron Canada, which each own 20 per cent, are committed to support expansion planning and will make decisions on participating in construction as starting times for the stages roll around.
Royal Dutch Shell PLC, while seeking to buy out the 22percent minority of Shell Canada's shareholders for $8.7 billion, supports the oilsands growth program with its established 78percent majority ownership, Mather said.
``It is a remarkable resource in a part of the world which is geo-politically safe,'' he said.
``We believe the fundamentals (of oil supply and demand) are very strong in the long term and the world needs the energy.''
Mather vowed Shell will not be ``distracted'' by market gyrations that cut oil to $50 US a barrel this month, or the lowest price since mid-2005 and 36 per cent below its $78.40 peak last summer.
``Prices will fluctuate. Costs will fluctuate as well,'' Mather predicted. ``We want to invest not just for this year but for many years to come.''
Athabasca's schedule for its new growth stages calls for completion of preliminary public consultations, environmental studies and formal regulatory applications this year.
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