By Phaedra Friend Troy
Shell (NYSE:RDS-A) (NYSE:RDS-B) began production from the Athabasca Oil Sands expansion project, adding 100,000 barrels per day to its oil sands operations in Canada.
Along with the existing Muskeg River Mine, the new Jackpine Mine is now producing to the Scotford Upgrader, which processes the produced bitumen or heavy oil into refined oil products.
Taking almost five years to complete, construction of the Jackpine Mine employed more than 6,500 crewmembers at the peak of construction. In fact, more than 650 engineers based in Calgary designed the facilities, and more than 34,000 different professionals worked at the construction site over the five years, including 3,500 electricians, 1,700 ironworkers, 2,000 pipefitters and 1,200 welders.
Construction on an expansion of the Scotford Upgrader facility is currently ongoing and is expected to be finished in 2011.
The Jackpine Mine adds another 100,000 barrels of oil equivalent per day to Muskeg River Mine’s production of 155,000 barrels of oil equivalent a day. With the expansion of the Scotford Upgrader complete, production capacity will increase to 255,000 barrels of oil equivalent a day through 2011.
By developing these mines simultaneously, Shell will be able to increase efficiency at the Athabasca Oil Sands project by integrating and operating the assets together.
“Canada’s oil sands are an important source of energy in a world with increasing energy needs,” said Marvin Odum, the upstream Americas director for Shell and the president of Shell Oil Company. “Shell is committed to developing this resource responsibly and to pursuing opportunities to reduce the impacts of our oil sands operations. To reduce the CO2 footprint of our oil sands operations, we are continuing to advance our proposed carbon capture and storage project, Quest, which could capture and store underground some 1 million tonnes of CO2 per year from the Scotford Upgrader.”
Currently in the early feasibility and planning stage, the Quest Carbon Capture and Storage project will be located at the Scotford Upgrader to reduce CO2 emissions from the Athabasca Oil Sands project.
With first production achieved in 2003, the Athabasca Oil Sands project is located on Lease 13 in Alberta, Western Canada.
The Athabasca Oil Sands expansion is one of a number of major projects Shell is undertaking to increase its worldwide oil and gas production by 11 percent from 2009 to 2012.
Shell is the operator of the Athabasca Oil Sands project with 60 percent interest. Chevron (NYSE:CVX) holds 20 percent interest in the project, and Marathon (NYSE:MRO) holds the remaining 20 percent interest.
