Total files plans for Fort Sask. upgrader
Multi-billion-dollar plant will employ thousands of construction workers for up to four years
Gordon Jaremko
The Edmonton Journal
Tuesday, May 08, 2007
EDMONTON - French oil giant Total has set a target date of 2013 or 2014 for completion of a multibillion-dollar bitumen upgrader to be built east of Fort Saskatchewan in Strathcona County.
The project is part of a larger plan to inject up to $15 billion into Alberta's oilsands, and extract as much as 300,000 barrels of crude per day, Total E & P Canada president Michael Borrell said in an interview Monday.
The subsidiary of Paris-based Total SA will employ up to 4,000 construction workers starting in 2010 to build the plant, after about two years doing the engineering work and seeking regulatory approval.
When completed, the upgrader will employ a permanent staff of 300 to 400 operators.
ON REGULATORY ROAD
The firm embarked on the regulatory process by announcing the Strathcona site and distributing a public disclosure document with provincial authorities led by the Alberta Energy and Utilities Board.
The plan calls for construction of a 200,000-barrels-daily bitumen upgrader in two stages.
The first phase will process 130,000 barrels a day. A second, 70,000-barrels-daily stage will be built when required, depending on bitumen supplies and oil markets, the company indicated.
No cost forecasts were disclosed. It is too early in the project's planning to make reliable estimates, Borrell said.
But industry analysts predicted the price tag for the first phase of Total's mammoth plant will be in a range of $5 billion to $6.5 billion.
A similar but smaller project by NorthWest Upgrading, now seeking AEUB approval at hearings northeast of Edmonton in Redwater, is forecast to cost $2.9 billion for the first of three 50,000-barrels-daily stages.
The Total plant will process bitumen extracted from 914 square kilometres of northern Alberta oilsands leases, where the 95,000-employee French firm -- the world's fourth-largest investor-owned oil company -- has accumulated ownership shares of 50 to 100 per cent since the mid-1990s.
Production is now in early stages, starting with initial flows of about 27,000 barrels per day from a partnership with ConocoPhillips on a lease called Surmont south of Fort McMurray.
Surmont output is scheduled to grow to 100,000 barrels daily soon after 2010. Total has also made a 10,000-barrels-daily start on a property known as Joslyn that the firm acquired with a $1.6-billion takeover of Deer Creek Energy in mid-2005.
KUDOS FROM THE HEARTLAND
Total won applause for its upgrader plan from the Alberta Industrial Heartland Association of local governments and Employment Minister Iris Evans, a former Strathcona County reeve.
"This project adds to their current oilsands extraction investment in the province and supports the government's strategy of increasing the value of our bitumen resource in the province," Evans said in a statement.
Total's move followed three years of consultation between industry, Strathcona County and the Heartland group, association executive director Larry Wall said.
Plans to expand local roads, utilities and pipelines are well advanced.
The Edmonton area won the project over two potential Fort McMurray sites. Better supply of skilled workers, service "infrastructure" and land zoned for heavy industry by co-operative local governments drove the site selection, Borrell said.
"This project is exactly the type of development we envisioned when our neighbouring municipalities came together in 1999 and formed the Alberta Industrial Heartland Association," Strathcona Mayor Cathy Olesen said in a statement.
Total's plant is the third in Strathcona's share of the budding upgrader row east of Edmonton, which also includes projects in adjacent Sturgeon County.
Oleson's municipality also has an expanding Shell plant at Scotford and the Heartland Upgrader under construction nearby.
Total's 3.6-square-kilometre Strathcona site is big enough to expand its upgrader beyond 200,000 barrels daily as bitumen production spreads to about 150 square kilometres of untouched oilsands leases beyond Surmont and Joslyn, he said.
The French firm will mature into a mainstay of Alberta industry and employment, Borrell predicted. In two years Total Canada grew from about a dozen staff to nearly 200 employees and recruitment continues, he said.
gjaremko@thejournal.canwest.com
© The Edmonton Journal 2007
