FIELD ACTIVITIES / Suncor Energy submits Project Millennium
Application to Government Regulators
$2.2 billion expansion is designed to boost Suncor's oil sands production
to 210,000 barrels a day by 2002
CALGARY, April 22 /CNW/ - Suncor Energy has moved one step closer to
realizing its oil sands expansion plans with the submission of its application
to proceed with Project Millennium to the Alberta Energy and Utilities Board
(AEUB) and Alberta Environmental Protection (AEP). The $2.2 billion expansion
is designed to boost Suncor's oil sands production to 210,000 barrels per day
by 2002, while bringing cash costs down to $10 to $11 per barrel.
''Expanding our oil sands business is a critical part of Suncor's growth
agenda,'' says Rick George, Suncor's president and chief executive officer,
who announced the regulatory filing at the company's annual meeting today.
''Filing the application to regulators is a milestone in moving Project
Millennium off the drawing board and closer to the construction phase. And
with the recent regulatory approval for the Wild Rose Pipeline project, we'll
soon have the pipeline capacity to move our increasing volumes and to access
new markets.''
The application is a 3,000-page document outlining the construction,
operation and reclamation plans for Project Millennium. The project includes
the expansion of Suncor's Steepbank Mine on the east side of the Athabasca
River, additional mining equipment, twinning of the extraction plant and the
upgrader, and expansion of the facilities that provide the operation with
water, steam and electricity. Suncor will build on its 30-years of oil sands
experience, while taking advantage of new technology and environmental
improvements.
The application also presents a comprehensive environmental impact
assessment, which analyzes the project's potential impact on air and water
quality, human health, the land, vegetation and wildlife. A socio-economic
impact assessment and a cumulative effects assessment of all announced
projects in the region are also included. The application was developed in
consultation with a wide range of stakeholders and attempts to fully address
all issues identified in each of these areas. A summary of the application
will be posted on Suncor's website (www.suncor.com).
Mike Ashar, executive vice president of Suncor Energy Inc. Oil Sands,
emphasizes that the filing of the application does not mean Suncor's plans are
inflexible.
''We will continue to work with community residents to ensure economic
gain for the region occurs in a socially and environmentally responsible
manner,'' says Ashar. ''Suncor's commitment with Project Millennium is to
continuously maintain and build upon the stakeholder relationships and
environmental improvements that were achieved as part of the Steepbank Mine
and fixed plant expansion projects.''
The next step in the process is a review of the application with all
stakeholders to ensure it is complete. Engineering work must be finalized
before the project goes before Suncor's Board of Directors for approval.
Approval from the Board and from AEP and the AEUB is required before
construction, currently scheduled for April 1999, can begin. Suncor plans to
commission the project between September 2001 and January 2002.
Suncor Energy is a Canadian integrated energy company operating an oil
sands plant in Fort McMurray, Alberta; a conventional exploration and
production business in Western Canada; a refining and marketing operation in
Ontario; and an oil shale development project in Queensland, Australia. Suncor
Energy common shares are listed for trading on the Toronto, Montreal and New
York stock exchanges.
Note: This news release contains forward-looking information. Actual
future results may differ materially. The risks, uncertainties and other
factors that could influence actual results are described in Suncor Energy's
annual report to shareholders and other documents filed with regulatory
authorities.
For more information about Project Millennium and Suncor Energy, please
see the attached backgrounder, visit our website at www.suncor.com.
SUNCOR OIL SANDS AND PROJECT MILLENNIUM BACKGROUNDER
Phases of Growth
- The initial phases of Oil Sands expansion, up to the completion of the
planned maintenance shutdown in May of 1997, involved various capital
projects that increased production from 59,000 to over 85,000 barrels
per day.
- The Steepbank Mine and Fixed Plant Expansion are in the final stages of
construction, at a cost of $660 million. This phase is expected to
increase daily production to 105,000 barrels per day by the end of
1998. It includes the new Suncor bridge completed in 1997, which
crosses the Athabasca River and connects the Steepbank Mine to Suncor's
oil sands plant.
- The $2.2 billion Project Millennium, announced in July of 1997, will
build on the Steepbank Mine and fixed plant expansion in two further
phases of growth. The first phase, called the production enhancement
phase (PEP), is designed to increase production to 130,000 barrels per
day in 2001. PEP is estimated to cost $190 million.
- The second part of Millennium will be the biggest phase of growth to
date at Suncor's oil sands operation. This $2 billion phase is designed
to increase Suncor's oil sands production to 210,000 barrels per day in
the year 2002, with an estimated capability of 35 years of production
at this level. As production reaches 210,000 barrels per day, economies
of scale and technological and reliability improvements are targeted to
reduce cash costs to the $10 to $11 per barrel range.
Economic Benefits
- Suncor estimates Project Millennium will create about 800 new jobs at
Suncor (in addition to the 1,600 people Suncor currently employs at its
oil sands operation). The construction workforce would peak at about
2,500 to 3,000 in the year 2000.
- Once operational, average operating expenditures for Project Millennium
alone are estimated at $285 million per year. These anticipated
expenditures could in turn create up to $140 million annually in
increased household income in Alberta. Suncor's goal to acquire goods
and services available from locally owned business should generate
substantial economic benefits for the region and the province.
- The project is estimated to increase the Regional Municipality of Wood
Buffalo's tax assessment base by about 30 to 35 per cent.
- The construction phase of the project alone is projected to create
$1.2 billion in household income within Alberta.
- Taxes and royalties to federal and provincial governments over the life
of the project could exceed $4.2 billion.
- Suncor is committed to ensuring the aboriginal community shares in the
benefits, through employment and business opportunities. In 1997,
Suncor awarded $16.3 million in contracts to aboriginal communities and
businesses. The target for aboriginal hiring is to reach 12 per cent of
Oil Sands' workforce by 2002.
- Plans are in place to deal with high housing prices and scarce rental
accommodation. During project construction, Suncor intends to establish
full service camps for construction workers, and provide short term
housing accommodation for permanent employees if necessary. Suncor is
also involved on a housing task force created by the Regional
Municipality of Wood Buffalo.
- Suncor will work with the community and with educational institutions
so potential workers in the region can acquire the skills that will be
needed in the increasingly complex oil sands industry.
- Suncor is assisting with funding for a transportation study through the
Regional Infrastructure Working Group, a group of oil sands developers
in the region.
- Suncor will continue to support charitable organizations and sponsor
community events throughout the Regional Municipality of Wood Buffalo.
In 1998, Suncor estimates it will donate about $850,000 to local
charities and events.
Project Millennium Environmental Impact Assessment
- New technology and environmental improvements are designed to:
- dramatically reduce emissions per unit of production, although
absolute emissions will increase due to the size of the project
- hold the line on SO2 emissions during normal operations, despite
more than doubling production
- reduce energy consumption per unit of production
- decrease water use over the long term through increased recycling
- reduce the discharge of water to the Athabasca River
- minimize increases in emissions
- Based on Suncor's and other announced developments in the Athabasca
region, cumulative air emissions are expected to stay below government
guidelines. The company is participating in joint community/industry
programs to monitor cumulative emissions. A new regional monitoring
network has been established to allow for ongoing assessment of air
quality in the area and the information is publicly available at all
times.
- Suncor is committed to reducing its greenhouse gas emissions by
implementing energy conservation programs, pursuing renewable sources
of energy, and acquiring domestic and international offsets (offsets
are reductions of greenhouse gas emissions achieved outside of Suncor's
operations). Given the global nature of the climate change issue,
reductions achieved anywhere in the world have the same beneficial
effect on the atmosphere.
- Suncor will continue to implement and assess its new reclamation
technology to return tailings to a dry landscape. The company has
committed to a thorough investigation of tailings pond emissions, and
will continue its involvement in a tailings research program with
Syncrude, Shell and the University of Alberta.
- The Athabasca and Steepbank River valleys will not be disturbed. There
will be a mining setback from the Steepbank escarpment. Mining,
drainage and reclamation will be managed to maintain ecological
objectives for creeks and wetlands. Mine clearing and reclamation will
be phased, to reduce disturbance to wildlife habitat. |
