NEWS RELEASE                                                                                                                MARCH 2013

Hundreds of Active Projects in $19 Billion Canadian Oil Sands Market

There are hundreds of active capital investment projects in the oil sands sector in Western Canada. Last year investment was more than $19 billion with even greater expenditures on the horizon. This is the latest forecast in Oil, Gas, Shale and Refining Markets and Projects published by the McIlvaine Company.

The investment is not only for expansion of the total production, but also for environmental improvements at existing facilities. The 2012 expenditures exceeded those in any of the last four years. To meet the expansion from 1.7 to 3.7 million bbl/day by 202l, will require annual expenditures twice the $19 billion spent last year.

The investment in new facilities comes in multibillion dollar chunks. For example, Sunshine Oilsands Ltd. has budgeted about US$3.5 billion for capital investment in its Canadian oil sands projects.

The expenditures to improve the environment are significant. The Quest Carbon Capture and Storage Project will reduce CO2 emissions from the Athabasca oil sands operation by 35 percent, or more than one million metric tons a year. The Scotford upgrader plant near Edmonton, Alberta, processes bitumen into synthetic crude oil. The steam-methane reformer units at Scotford produce hydrogen for upgrading bitumen, a process that releases carbon dioxide. Quest will capture CO2 from Scotford using an amine solvent, a liquid comprising water and amines, then transport it via an 80 kilometer underground pipeline to a storage site north of Shell’s Scotford facility to the northeast of Fort Saskatchewan, Alberta. Captured CO2 will be injected more than two kilometers underground into a porous rock formation called the Basal Cambrian Sands, which is located beneath layers of impermeable rock. According to the Quest project website, “Sophisticated monitoring technologies will ensure the CO2 is permanently stored.” Shell Canada executed a contract with Fluor Corp for engineering, procurement and construction (EPC) of the Quest project. Fluor Corp total cost of the project is estimated at USD1.35 billion.

Projects to improve water quality are also requiring significant capital investment. Grizzly Oil Sands ULC selected GE’s (produced water evaporation technology for its Algar Lake project near Fort McMurray, Alberta, Canada). Phase 1 of the Algar Lake Steam-Assisted Gravity Drainage (SAGD) project will produce 5,000-6,000 barrels per day of bitumen and, by using GE’s produced water evaporation process, will recycle up to 97 percent of the produced water. Grizzly’s Algar Lake is one of three projects, including Harvest Black Gold, to choose GE’s patented evaporative technology to treat and recycle its SAGD wastewater.

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