Shell Scotford Upgrader Expansion goes on stream
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Expansion of Shell's Scotford upgrader goes on stream
By The Canadian Press | The Canadian Press Wed, 4 May, 2011
CALGARY – Shell Canada says it has successfully started up production from the company's Scotford upgrader refinery expansion project near Edmonton.
The 100,000 barrels-per-day expansion takes upgrading capacity at Scotford to 255,000 barrels-per-day of heavy oil from the Athabasca oilsands in northern Alberta.
"This startup is an important milestone for our heavy oil business," said Marvin Odum, director of Shell's upstream or oil production + business in the Americas.
"And it adds new capacity from an important source of oil in a world requiring more secure energy."
Wednesday's announcement marks the first commercial production from the upgrader expansion. The Scotford Upgrader processes oilsands bitumen – heavy oil – from the Muskeg River Mine and Jackpine Mine, for use in refined oil products.
With production capacity at the Athabasca Oil Sands Project now at 255,000 barrels a day, Shell said it wants to improve efficiency in its refinery operations.
Design and engineering work also continues on the proposed Quest carbon capture and storage project at the Scotford refinery.
The planned project would capture and store underground about one million tonnes of carbon dioxide a year. A final decision to begin construction could come in 2012, once all regulatory approvals are in place.
Shell Canada owns 60 per cent of the Athabasca Oil Sands Project, along with Chevron Canada Limited (NYSE:CVX), with 20 per cent, and Marathon Oil Corporation (NYSE:MRO) also with 20 per cent.
The oilsands project includes the Muskeg River Mine, Jackpine Mine and Scotford upgrader.
Shell Canada is a unit of global giant Royal Dutch Shell Group plc and employs about 8,000 people across the country.
It is a major oilsands operator, natural gas and sulphur producer and runs a string of Shell=branded gasoline stations.
Royal Dutch Shell is (NYSE:RDS) incorporated in England and Wales, has its headquarters in The Hague and is listed on the London, Amsterdam, and New York stock exchanges. It operates in more than 100 countries.
This news article talks as though the Scotford upgrader expansion just started up but perhaps means the upgrader now operates on its own source bitumen crude instead of purchased feed.
The Scotford upgrader & expansion which has two LC Finer reactors (more expensive option) instead of Coker, is adjacent to the Shell Edmonton Refinery. A Scotford Upgrader 2 is planned to expand in 4 phases and raise capacity from todays 255,000 BPD (with expansion 98 MBD online) to 400,000 bpd eventually.
The Scotford Upgrader expansion actually came online in Dec 2007 on purchased feedstock soon after the Nov fire in original upgrader. This was about the same time that Marathon acquired its 20% interest in the Upgrader thru its purchase of the Western Oil Sands in Dec 2007 which would help supply new coking operations like Detroit Refinerys new 28MBD coker in EPC stage. (The Shell Scotford Upgrader is now 60% owned by Shell, 20% Marathon and 20% Chevron.).
Shell once talked about Scrapping or down-sizing its plans for a Scotford Upgrader (2) near Edmonton which would take capacity to 400MBD & re-routing the Bitumen crude to Deer Park &/or Martinez. Shell Deer Park runs Mexico Mayan crude but supply was recently 2008 cut by 15% due Pemex production problems.
Some of this was likely negotiation strategy or leverage against Pemex crude cuts but slumping crude production is real issue and will likely continue until Mexico opens exploration up to foreign investors who have the needed technology. And if the New Pemex Grassroots refinery goes into construction – eventually its crude demands could prompt additional round cuts to Refinery JV's in US.
(More on Shell Scotford upgrader/Edmonton Refinery see past Scotford news items posted/emailed Upgrader/Coker news- July 2008 & Oct 2007) Regards