Shell Canada files regulatory applications for oil sands expansion projects

CALGARY, April 29 /CNW/ - Shell Canada announced today that it has filed
regulatory applications to expand capacity at both the Muskeg River Mine and
Scotford Upgrader.
The Muskeg River Mine expansion plan includes developing additional
mining areas on the west side of Lease 13 and on Lease 90, adding another
bitumen extraction train to the existing plant and a number of debottlenecking
projects. These plans will increase the capacity of the Muskeg River Mine from
155,000 to about 300,000 barrels per day. Regulatory approval for this
expansion is anticipated in mid-2006. This, in combination with the Jackpine
Mine approval received in 2004, would provide Shell with regulatory approvals
for mining developments encompassing all of Lease 13 and Lease 90, totalling
500,000 barrels per day of bitumen.
The Scotford Upgrader expansion plan includes the addition of a third
bitumen upgrading train which, along with debottlenecking of the existing
facilities, will increase upgrading capacity to approximately 300,000 barrels
per day. Regulatory approval for this expansion project is also anticipated
mid-2006. Further additions to upgrading capacity will be made in due course
to bring total capacity to 500,000 barrels per day in line with future mining
expansions.
Shell's strategy to achieve its longer-term goal of producing more than
500,000 barrels per day has been refined to take account of lessons learned
from the original project execution and new construction techniques. Shell
plans to further develop its leases in the Athabasca area by employing a
continuous construction, "building-block" approach. Each building block would
be sized, at least initially, at approximately 100,000 barrels per day. As
part of this strategy, Shell would start construction of the first 100,000
barrels per day mining expansion on Lease 13 in 2006 concurrent with a  
similar-sized expansion of the Scotford Upgrader and debottlenecking projects
at both facilities. Opportunities to integrate new production trains with
existing facilities will be considered where practical to reduce construction
and operating costs. Additional building blocks, including both mining and
upgrading expansions, would follow in due course.
"We believe that a building-block approach will maximize construction
efficiency as we grow our oil sands business," said Clive Mather, President
and Chief Executive Officer, Shell Canada Limited. "We're building from a
solid base of oil sands experience and will leverage off that as we drive
toward more than 500,000 barrels per day of production."
Subject to final investment approvals, construction of the first
expansion projects on Lease 13 and at the Scotford Upgrader is expected to
start in 2006 and to be completed in 2009. These projects, including
debottlenecking of the existing facilities, are expected to increase synthetic
crude production to about 300,000 barrels a day by 2010. Actual timing for
these projects will depend on the outcome of the regulatory process, market
conditions, final project costs and consultation with key stakeholders. A
capital cost estimate for these projects will be provided in 2006 following
regulatory and final investment approvals. Peak construction workforces are
expected to be approximately 4000 at the mine site and 6400 at the upgrader.
Copies of Shell's applications are available for viewing at public
locations in Fort McMurray, Fort Saskatchewan, Edmonton and Calgary. For more
information or to view online, please visit Shell's web site at
www.shell.ca/oilsands.

The Athabasca Oil Sands Project consists of the Muskeg River Mine located
north of Fort McMurray, Alberta and the Scotford Upgrader located near
Edmonton and is a joint venture among Shell Canada Limited (60 per cent),
Chevron Canada Limited (20 per cent) and Western Oil Sands L.P. (20 per cent).
Chevron Canada Limited and Western Oil Sands L.P. have the option to
participate with Shell Canada Limited in developing additional oil sands
resources in the Athabasca area.


This document contains "forward-looking statements" based upon current
expectations, estimates and projections of future production, project startup
and future capital spending. Forward-looking statements include, but are not
limited to, references to future capital and other expenditures, drilling
plans, construction activities, the submission of regulatory applications,
refining margins, oil and gas production levels, resources and reserves
estimates.
Readers are cautioned not to place undue reliance on forward-looking
statements. Forward-looking statements involve numerous risks and
uncertainties that could cause actual results to differ materially from those
anticipated by the Corporation. These risks and uncertainties include, but are
not limited to, the risks of the oil and gas industry (including operating
conditions and costs), demand for oil, gas and related products, disruptions
in supply, project schedules, the uncertainties involving geology of oil and
gas deposits, the uncertainty of reserves estimates, fluctuations in oil and
gas prices and foreign currency exchange rates, general economic conditions,
commercial negotiations, changes in law or government policy, and other
factors, many of which are beyond the control of the Corporation.