Shell Canada Gives Up on Alberta Refinery Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--Earlier in July, Shell Canada Limited (Calgary, Alberta), a subsidiary of Royal Dutch Shell plc (NYSE:RDS.A), gave up on its plan to build a $15 billion heavy oil refinery in Sarnia, Ontario, along the St. Clair River. The planned 10,000-acre refinery would have been built near the Canadian-American border where several refineries already exist.

According to Shell Canada, the refinery would have been able to process 150,000 to 200,000 barrels per day of heavy crude oil produced from the oil sands in northern Alberta, amounting to several million barrels annually.

The plan to build the proposed heavy oil refinery in Sarnia was announced by Shell Canada in November 2006. Feasibility studies of the project were conducted accordingly. In the following two years, Shell Canada carried out preliminary design work and the environmental impact assessment process.

Shell Canada has now asked employees to stop the design and development work on the project. The company called a stop to the refinery project after comprehensive evaluation of environmental impact, market situation and the inflation pressure that the oil and gas industry is currently facing.

Amrik Ahluwalia, Shell's General Manager of Manufacturing Expansion stated in a press release that the decision to stop the refinery in Sarnia is a difficult one and was made only after very careful consideration. Shell's existing operations in St. Clair Township will not be affected by the cancellation of this refinery project.

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