September 22, 2008

STEPHEN DAFOE

Construction is well underway on the Shell Scotford Upgrader Expansion 1, located near Fort Saskatchewan, Alberta.

Bantrel makes significant progress on Shell Scotford Upgrader Expansion 1

STEPHEN DAFOE

correspondent

Fort Saskatchewan

Just five years after opening a heavy oil upgrader near Fort Saskatchewan, Alberta, Shell Canada is well on its way to completing its first expansion.

The Shell Scotford Upgrader Expansion 1 project broke ground in November 2006.

It will create a third bitumen upgrading train to Shell’s existing facility, increasing production by 100,000 barrels per day.

The current facility, which opened in 2003, has a capacity of 155,000 barrels per day.

The project is part of the Athabasca Oil Sands Project (AOSP), of which Shell Canada owns 60 per cent with the remaining 40 per cent owned in equal measure by Chevron Canada and Marathon Oil Canada Corporation.

Paul Hagel, senior communications representative with Shell Canada, said the project is one of the largest oil and gas projects under construction in North America.

“We have currently about 3,000 people working on the Scotford Upgrader Expansion 1,” he said.

He added that an equal number are working on the Albian Sands Mining Expansion 1 project, 15 kilometres from the company’s Muskeg River Mine in Northern Alberta.

Alberta-based Bantrel was hired to orchestrate the Scotford expansion, estimated to cost about $6 billion of the projected $10 billion to $12.8 billion total project cost.

“When you undertake mega projects like this, you usually bring in what we call an EPCM – an engineering, procurement and construction management company,” Hagel said.

“People like Bantrel have the experience and background to oversee a mega project of this stature and they’ve earned a reputation in doing this around the world.”

Hagel explained that the Scotford expansion will utilize the services of hundreds of suppliers, contractors and vendors, but the two major players in the project are Edmonton-based PCL Industrial Contractors Inc. and Houston-based Kellogg Brown and Root (KBR).

KBR was awarded the contract in May of 2007 to provide fabrication and construction services for the project’s atmospheric, vacuum and sulphur recovery unit, while PCL was awarded the contract to provide underground piping, concrete foundations, structural steel work and electrical systems for the Residue Hydro Conversion and Integrated Hydro Treatment units.

Both the existing Scotford facility and expansion use hydrogen conversion technology to inject hydrogen into the heavy bitumen, resulting in an upgraded material that can be further refined into gasoline and other petroleum products.

Hagel said that, although Alberta’s labour shortages and weather have been challenging for the project, one of the biggest challenges has been organizing such a large work force.

“We’re there, we’re doing excellent,” he said, adding that it has been a productive summer season.

“Everybody is working extremely hard and we’re looking to have a world-class start up around 2010.”

The Shell Scotford expansion is one of several upgrader projects scheduled for Alberta’s Industrial Heartland Region.

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