January 26, 2007
Shell Canada to expand oil sands production
Calgary, Alberta – Shell Canada says that it is outlining further expansion of its oil sands production and could potentially increase mine-able bitumen production to approximately 770,000 barrels per day (bpd). The expansion is more than four times the current output.
Shell announced an incremental expansion strategy in April 2005, designed to increase mine-able bitumen production and upgrading capacity through a series of expansion projects. Its first 100,000 bpd expansion, Athabasca Oil Sands Project Expansion 1, was approved in November 2006, with full start-up expected in 2010. The project will increase production from 155,000 bpd to 255,000 bpd, at a cost of between $10 and $12.8 billion. In 2005, the company estimated the cost would be $7 billion. Additional expansions beyond the Expansion 1 project could potentially bring production to the 770,000 bpd estimate.
In addition to existing regulatory approvals and expansion plans, Shell’s growth strategy includes Jackpine Mine Expansion and an additional mine on the west side of the Athabasca River, called Pierre River Mine. The company will face a significant increase in greenhouse gas emissions and plans to design its upgrader expansions to be carbon-capture ready.