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Keeping Canada's oil - Shell Canadian Refinery no go
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Albertans and other oil rich provinces are always asking, more so now, why the price of gas is so high given they have all of it! Thing is, crude oil is pumped to the States, refined, and then pumped back to Canada. Obviously Canada would like to add to the value of their oil by refining it close to home. Shell was planning to open a a new refinery in Ontario, a decision that could set back Canada's efforts to extract more jobs and value from the oil sands, but now they are pulling the plug.
Expansion of existing refineries in the United States to process future Canadian production might be more cost effective than building a new refinery, the Hague-based firm said.
Shell has been incorporating its Canadian operations into its global business since last year when it bought the 22 per cent of the Canadian unit it didn't already own. Now, it's looking at retooling its Martinez, Calif., and Deer Park, Tex., refineries to take more Alberta crude.
There is still one Canadian option: A $27-billion upgrader Shell is considering building in Alberta could handle some of the future output from the Athabasca Oil Sands Project (AOSP).
According to CTV Globe and Mail that's because the Alberta upgrader is also in question.
Last year, Shell filed plans with regulators to build the largest oil sands upgrader to date, a 400,000-barrel-a-day behemoth to be built in Alberta in four stages at a price tag of up to $27-billion.
An upgrader, a vast, expensive industrial complex, removes the heaviest parts of the oil sands bitumen so it can travel down a pipeline. One alternative that some tout as less costly is to dilute the bitumen with a lighter petroleum product.
Earlier this year, the company said it was looking at alternatives to the expensive project, including shipping crude to U.S. refineries. The company will likely decide on the upgrader in 2010, Mr. Collyer said.
If Shell opts to process more of its Alberta crude in the U.S., that would erode Canada's ability to benefit from the company's aggressive oil sands expansion. The company is aiming to produce 770,000 b/d in the future from the AOSP, where its current production is 155,000 b/d.
Other key oil producers, including Brazil and Persian Gulf powerhouses like Saudi Arabia, are investing heavily in refining and chemical sectors to provide added employment for their young and growing populations.
Shell had been considering building a 150,000- to 250,000-b/d refinery next to its existing facility in Sarnia, Ont. The new refinery, which would have been the first to be built in Canada since 1984, was originally seen by Shell's independently operating Canadian subsidiary, as a way to avoid the high costs of building new crude-processing capacity in Alberta.
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econmod
Broker
/ Moderator
Jul 9, 2008, 12:13 PM
Post #1 of 1
(1511 views)
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