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Gold/Mining/Energy : Canadian REITS, Trusts & Dividend Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Taikun who wrote (8922)	2/26/2005 6:27:15 AM
From: johnlw	Read Replies (1) \| Respond to of 11633

Taikun Oh boy I am probably getting over my head here…I hope we are talking about the same thing. I will try to clear up where I am coming from. CNQ is going to upgrade their new production in MacMurray: “Canadian Natural will further upgrade the bitumen to a sweet synthetic crude oil using proven delayed coking and hydro-treating technologies. All of the upgrading facilities are located on the Horizon plant site to allow energy integration and sharing of common infrastructure.” cnrl.com SU has more upgrading expansion planned: “The first phase of Firebag and expanded upgrading facility are expected to bring Suncor's production capacity to 260,000 barrels per day in 2005 – an important step in reaching our goal of up to 550,000 barrels per day by 2010 to 2012” suncor.com NXY has their own upgrader being built: “The Long Lake Project will produce and upgrade bitumen into a superior, higher value synthetic crude oil at a significant cost advantage over competitive technologies, by virtually eliminating the need for externally purchased natural gas.” longlake.ca SHC has the Scottford upgrader: “The Scotford Upgrader is located next to Shell Canada's Scotford Refinery near Fort Saskatchewan, Alberta. The Scotford Upgrader uses hydrogen-addition technology to upgrade the high viscosity "extra heavy" crude oil (called bitumen) from the Muskeg River Mine into a wide range of synthetic crude oils. A significant portion of the output of the Scotford Upgrader is sold to the Scotford Refinery. Both light and heavy crudes are also sold to Shell's Sarnia Refinery in Ontario. The balance of the synthetic crude is sold to the general marketplace.” shell.ca Looks like the major players in the tar sands are building upgraders for their produced bitumen so they will be shipping synthetic crude to existing refiners…..and is there a need for someone to build some refining capacity in the States? Here is what I found on the Redwater upgrader proposal: “Our Plans The first phase of the Project will come on stream in early 2010 with a capacity of 50,000 barrels of bitumen per day. Capital cost of the first phase is expected to be more than CDN$1.2 billion. Up to three additional phases are expected to be built over time to meet additional market demand for upgrading services. The Project is being developed in response to significant increases in bitumen and heavy oil production in Alberta, primarily from the Province’s vast reserves of tar sands. The NorthWest Upgrader will enhance the economic value of Alberta’s bitumen production by upgrading it to light sweet crude oil before sending it to refineries for conversion to end products. The Project will be a significant, long term contributor to Alberta’s economy.” northwestupgrading.com The intent of this is to handle bitumen produced by smaller players who don’t have their own upgraders I guess. So from the FRU.un concern I posted maybe it revolves around the heavy oil production more so than the bitumen? IPL.UN has the gathering system on the east side of the province for the Cold Lake heavy oil, it either goes to IMO at Strathcona , HSE at Lloydminster, or to Hardisty where it ties into TER Express pipeline that ends up around St. Louis at the Wood River refinery by the looks of things. interpipelinefund.com pipelines.terasen.com Summary: Looks to me like the issue of bitumen to synthetic crude is being addressed. It is going to take time and a lot of dough to resolve. There appears to be a shortfall of heavy oil upgrading (or is there a project I am missing). Opportunity at Wood River? In the interim there maybe bottlenecks. JW