Business
Shell Canada provides AOSP Expansion 1 update
Shell Canada provides AOSP Expansion 1 update.
About this update from Mapath Capital Corp
[{"type":"text","content":"\n\n\n\n\nCALGARY, July 5 /CNW/ - Shell Canada Limited provides the following\nupdate on expansion plans for the Athabasca Oil Sands Project (AOSP):\n\nAOSP Expansion 1\n\nShell Canada is the majority owner of the Athabasca Oil Sands Project\n(AOSP), which is currently designed to produce 155,000 barrels of bitumen per\nday. Shell Canada's surrounding acreage could support production expansion to\nmore than 500,000 barrels of bitumen per day, and the Company is planning a\nseries of expansions over the next decade to reach that long-term production\ngoal. The AOSP Expansion 1 will add approximately 100,000 barrels per day of\ncapacity, and lay down associated infrastructure foundations for subsequent\nexpansion phases. Plans for AOSP Expansion 1 include expansion of both the\nexisting Muskeg River Mine and the Scotford Upgrader.\nEarlier this year Shell Canada initiated a detailed review of the\nproposed AOSP Expansion 1. Although not yet complete, it is already clear that\nthere has been significant upward pressure on capital costs of the project.\n\"Clearly, AOSP Expansion 1 has great potential, and has to be seen as a\nstepping stone in the broader expansion plan for AOSP. However, in this heated\nmarketplace, cost and schedule control is the top priority,\" said Brian\nStraub, Shell Canada's Senior Vice President, Oil Sands. \"We see signs of a\nheated market for labour, materials and equipment everywhere and we must\nassure ourselves that we can execute successfully. Right now our focus is on\nmitigating the costs and risks.\"\nShell Canada is currently involved in a number of internal and external\nproject reviews to capture best practice in all aspects of the design,\nschedule and construction strategies for the AOSP expansion. These reviews\nwill continue through the month of July, and include how to address the twin\nchallenges of cost and supply of labour and materials. A further update will\nbe provided at the end of the month.\nIn the meantime, Shell Canada continues front-end engineering work on\nAOSP Expansion 1 to support the planning schedule and is securing commitments\nfor major long-lead items. A final investment decision is currently scheduled\nfor the fourth quarter of 2006 and will be set in the context of both the\nultimate potential of this substantial resource and long-term shareholder\nvalue creation.\n...