Alberta EUB Signs Off on Suncor Expansion Plans

Suncor Energy Inc. said Wednesday that the Alberta Energy and Utilities Board (EUB) has approved the company's application to construct a third oil sands upgrader, the centerpiece in Suncor's plans to expand oil sands production to more than half a million barrels per day (bpd) in 2010 to 2012. Regulators also approved Suncor's associated plans to develop the Steepbank mine extension, a key element in supplying bitumen to future upgrading operations. The approval includes several conditions.

"Regulatory approval of our upgrader and mine expansion applications is a major milestone in Suncor's growth plans," said Steve Williams, Suncor's executive vice president, Oil Sands. "This was the most complex regulatory filing in Suncor's history, involving thousands of hours of consultation with local, regional and provincial stakeholders during project planning. We worked very closely with stakeholders on this application and the conditional approval received today reflects those efforts. We believe we will be able to meet the conditions."

In granting conditional approval, the EUB places several conditions on Suncor, including three conditions dealing specifically with managing tailings, the mixture of water, clay, sand and residual bitumen produced during the extraction process.

Where appropriate, Suncor's implementation of the conditions will be integrated into detailed engineering and site preparation work for both projects, which is expected to begin in early 2007. Once engineering is sufficiently advanced, Suncor management expects to seek final Board of Directors approval and to provide detailed cost estimates.

While planning and preparations for this next phase of growth are under way, work continues on the company's current phase of oil sands expansion. With commissioning targeted in 2008, the current expansion is expected to increase production capacity to 350,000 bpd from current capacity of 260,000 bpd. Engineering for this project is nearing completion and, as of the end of the third quarter (September 30, 2006), construction was 65% complete. Work under way also includes the expansion of Suncor's in situ operations, with construction targeted for completion in 2007.

Suncor Energy Inc. is an integrated energy company headquartered in Calgary, Alberta. Suncor's oil sands business, located near Fort McMurray, Alberta, extracts and upgrades oil sands and markets refinery feedstock and diesel fuel, while operations throughout western Canada produce natural gas.


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