Shell Canada Starts Integrated Oil Sands Operations

The Athabasca Oil Sands Project (AOSP) achieved fully integrated operation on April 19, 2003, when the Scotford Upgrader successfully started processing bitumen from the Muskeg River Mine.

In late March, the Scotford Upgrader, located near Fort Saskatchewan, Alberta, began making initial runs of light synthetic crude using purchased feedstocks. The upgrader has continued to build operational experience by running purchased feedstocks until bitumen from the mine became available for processing.

Production of bitumen from Train 1 of the Muskeg River Mine, located 75 kilometres north of Fort McMurray, Alberta, resumed on April 4, 2003. The Corridor Pipeline and associated tankage were subsequently filled, and Train 1 of the Scotford Upgrader has now started processing bitumen from the mine to manufacture synthetic crude oil products.

Shell expects Train 2 of the Muskeg River Mine to be available for use in May, providing additional bitumen production capacity. Train 2 of the Scotford Upgrader will be brought on stream as soon as this additional bitumen production becomes available. Some production volatility is likely during initial operations. The focus will be on ramping up to the designed production rate of 155,000 barrels per day of bitumen in the third quarter of 2003.

The Athabasca Oil Sands Project is a joint venture of Shell Canada Limited (60 per cent), Chevron Canada Limited (20 per cent) and Western Oil Sands L.P. (20 per cent). At full rates, the project will supply the equivalent of 10 per cent of Canada's oil needs. Shell's share of AOSP production will increase the Company's total barrels-of-oil equivalent production by more than 50 percent.

Tim Faithfull, Shell Canada's President and CEO, said, "We're now seeing fully integrated production from the Athabasca Oil Sands Project a goal that thousands of people have worked long and hard to achieve. It takes a broad range of business and technical capabilities as well as great financial strength to successfully conclude a project of such immense size and scope and I'd like to thank all those who contributed to this achievement. Oil Sands is now poised to make a major contribution to Shell Canada's future earnings."

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