Shell Says Athabasca Oil Sands Turnaround Project Delayed

Shell Canada Limited says that completion of the first major scheduled maintenance turnaround of the Athabasca Oil Sands Project will be extended beyond the previously announced eight week duration because additional work is required. Start-up is now expected to begin late June, building to fully integrated production rates by mid-July.

The complex and extensive shutdown, which includes the Muskeg River Mine (MRM) and the Scotford Upgrader, started the beginning of May. Following initial cleaning and inspection of the equipment, a decision was taken to undertake additional maintenance and repair work at both MRM and the Upgrader including the removal of large amounts of coke from the reactor vessels at Scotford. This turnaround is the largest in Shell Canada's history and employed over 4,000 maintenance workers at its peak.

Shell's share of the turnaround costs is expected to be in the range of $100 million to $125 million, the majority of which will be incurred in the second quarter.

Shell is working closely with customers to manage the reduced synthetic crude production due to the shutdown extension. In addition, Shell's Scotford Refinery has secured alternate feedstock so its operations and customer commitments are unaffected.

The Muskeg River Mine is located about 75 kilometers north of Fort McMurray, Alberta. The Scotford Upgrader is located near Fort Saskatchewan, northeast of Edmonton. Together the facilities make up the Athabasca Oil Sands Project, a joint venture among Shell Canada Limited (60%), Chevron Canada Limited (20%) and Western Oil Sands L.P. (20%).