FIELD ACTIVITIES / Novagas Canada & Suncor Energy sign Agreement
CALGARY, Jan. 30 /CNW/ - Novagas Canada Ltd. (NCL) and Suncor Energy Inc.
(Suncor) have reached an agreement for NCL to develop a $164 million (Cdn.)
project that will extract and separate natural gas liquids and olefins from
''off-gas'', a by-product of the oil sands upgrading process.
Under the agreement, Suncor will supply the project with off-gas from its
oil sands facility near Fort McMurray, in northeastern Alberta. NCL will build
an extraction facility near Suncor's oil sands operation to remove natural gas
liquids and olefins from the off-gas.
The recovered liquids and olefins will then be transported in batches via
Suncor's 385-kilometre Oil Sands Pipe Line to NCL's Redwater fractionation
facility, located northeast of Edmonton. At Redwater, NCL will separate the
liquids and olefins into commercial products such as ethane, propane,
propylene, butane and condensate. NCL will build an additional fractionation
tower at its Redwater facility to add propylene production capability.
''This project represents an innovative advancement in Alberta's natural
gas and oil sands industries,'' says Randy Findlay, president of Novagas
Canada Ltd. ''It's the first time that the natural gas liquids and olefins
contained in oil sands have been targeted for their higher market value.''
Construction of the liquids extraction project is slated to begin in the
summer of 1998, pending regulatory approval, with completion set for the third
quarter of 1999. NCL will own all new related facilities and will market the
upgraded liquids as commercial products.
Initially, NCL expects to recover and market an estimated 10,000 barrels
per day of natural gas liquids and olefins. Volumes are expected to double
when Suncor's planned, $2.2-billion (Cdn.) expansion of its oil sands
facility, expected to come on stream in the year 2002, is completed.
''This project has two significant benefits for Suncor,'' says Mike
Ashar, executive vice president of Suncor's oil sands division. ''It provides
Suncor with an additional source of revenue from the sale and transportation
of liquids in our off-gas and it improves the environmental performance of our
oil sands operations. Suncor is committed to reducing emissions - this project
is a step forward in the right direction.''
Currently, the off-gas, including the natural gas liquids and olefins, is
used as an energy source for the oil sands upgrading process. With the
construction of the project, Suncor will significantly enhance the market
value of the off-gas resource. Suncor will replace the hydrocarbons extracted
with cleaner-burning natural gas.
By removing the natural gas liquids and olefins and using cleaner-burning
natural gas for fuel, the project is expected to reduce sulfur dioxide
emissions at Suncor's Fort McMurray facility by up to three tonnes per day
initially. When Suncor's proposed expansion project is complete in 2002, the
company expects that those emissions will be reduced by up to six tonnes per
day.
NCL expects that the project, including pipelines, will generate
approximately 70,000 person days of employment, with the work force peaking at
around 250 during the construction phase. On completion, the liquids
extraction project will provide full-time employment for 16 people, including
contract maintenance services.
Novagas Canada Ltd. is a fast-growing natural gas and natural gas liquids
services company. The company focuses its activities on non-regulated
midstream opportunities within the natural gas value chain, offering services
in natural gas gathering and processing, and natural gas liquids extraction,
transportation, fractionation, marketing and storage. NCL is 100 per cent
owned by NOVA Gas International Ltd., a wholly owned subsidiary of NOVA
Corporation of Calgary, Canada. NOVA's common shares trade on the Alberta,
Toronto, Montreal and New York stock exchanges under the trading symbol NVA.
Visit NOVA's web-site at www.nova.ca.
Suncor Energy Inc. and its subsidiaries operate an integrated energy
business that includes an oil sands plant in Fort McMurray, Alberta, an
exploration and production business in Western Canada, refining and marketing
operations in Ontario and Quebec, and an oil shale development project in
Queensland, Australia. Suncor's common shares are listed on the Toronto,
Montreal, Vancouver and New York stock exchanges. Visit Suncor's web-site at
www.suncor.com. |
