October 22, 2012

Half billion dollar agreement paves way for oilsands facility

Williams Energy Canada has signed a deal with Canadian Natural Resources Limited (CNRL) to invest about half a billion dollars in the construction of a liquids extraction plant at an oilsands facility near Fort McMurray, Alberta.

“This new agreement will build on the unique expertise and large-scale infrastructure we’ve built in Canada,” said David Chappell, president of Williams Energy Canada.

“The scale that we are building here – with fractionation, distribution and storage – gives us the ability to generate significant long-term incremental value from our operations.”

Under agreement, Williams plans to build a new liquids extraction plant and supporting facilities at CNRL’s Horizon oilsands upgrader.

The company also plans to build an extension of its Boreal Pipeline that will enable transportation of the Natural Gas Liquids (NGL)/olefins mixture to its expanded Redwater facility outside of Edmonton.

Williams will capture and process a rich NGL/olefins mixture that would normally be burned by CNRL.

In exchange for the NGLs and olefins transferred to Williams, CNRL will receive methane in return, which will be used as fuel for its Horizon operations.

The NGL/olefins mixture will be fractionated at Williams’ Redwater facilities into an ethane/ethylene mix, propane, polymer grade propylene, normal butane, an alkylation feed and condensate.

Williams expects to recover 12,000 barrels per day (bpd)of the NGL/olefins by mid-2015 and about 15,000 bpd by 2018.

The new plant and pipeline expansion will allow Williams to extract, transport, fractionate, own and market NGLs and olefins recovered from offgas.

The total capital expenditures expected between 2012-2104 for the project is $500 million to $600 million. Once full operating capacity is achieved at Horizon, processing the offgas is expected to reduce emissions of carbon dioxide (CO2) by an average of about 200,000 tonnes per year.

It is expected to reduce emissions of sulphur dioxide (SO2) by an average of about 2,000 tonnes per year.

JOC NEWS SERVICE

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