Shell Canada Leads $10 Billion Expansion Construction at Alberta’s Newest Oil Sands Project

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Researched by Industrial Info Resources (Sugar Land, Texas). Dwarfing all other industrial projects that began construction in 2006, construction activities leading up to a $10 billion investment in new facilities and infrastructure for the Athabasca Oil Sands Project began this summer. Known as the Athabasca Oil Sands Project Expansion 1, the project will utilize six to ten general contractors and will incorporate the expansion of froth treatment at the existing Muskeg River oil sands mine, expansion of the Scotford Upgrader, construction of a new mine known as Jackpine, with related extraction trains, and construction of infrastructure connecting the two mines and processing facilities. The Athabasca Oil Sands Project, which is operated by Albian Sands Energy, Incorporated (Fort McMurray, Alberta), a joint venture between Shell Canada, Chevron Canada, Limited, and Western Oil Sands began operation at the Muskeg River mine in 2003, making it the newest oil sands operation on the block.

Albian Oil Sands produced 159,000 barrels per day in 2005. Phase I expansion plans are to increase capacity by 100,000 barrels per day.

The project is utilizing a joint venture between AMEC and Colt Engineering to provide engineering and construction management for the project. AMEC-Colt (Calgary, Alberta) has mobilized on the site of the Jackpine expansion, which is 75 kilometers north of Fort McMurray, across the river from the existing Muskeg River mine. Civil/site work is well underway. Detailed engineering is about 20% complete. Construction of the new extraction train foundations at Jackpine is scheduled to being in the spring of 2007. At the peak of construction in 2008, the expansion will require more than 6,000 qualified tradespeople and will employ about 700 operating jobs.

At the Muskeg River mine, Flint Energy Services, Limited (Calgary, Alberta) has been selected as the general construction contractor for the expansion of the froth treatment facilities. Flint Energy had been on site involved with pre-construction activities. At the Scotford Upgrader, construction is scheduled to begin in the summer of 2007 on this $2.5 billion portion of the expansion. Bantrel, Incorporated (Calgary, Alberta) has been awarded the engineering, procurement, and construction management for the upgrader expansion phase I.

A second and third phase of expansion will add an additional 100,000 barrels per day each, expanding production up to 550,000 barrels per day in the 2010-2020 range.

No one can accuse the proponents of the Athabasca Oil Sands Project for not thinking big. This massive three-year construction effort is sure to test the already strained labor, equipment, and service industries that serve the area. Shell Canada is not alone, Canadian Natural Resources Limited (Calgary, Alberta) is at the peak of construction of its $10 billion grassroot Horizon Oil Sands project, which should be complete by 2008.

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