Shell Canada partners with BHP in Alberta oil sands project

Jul 14, 1997 02:00 AM

June 17, 1997 Shell Canada Ltd. found a partner in Australia's BHP Minerals to help plan the development of its proposed $ 722 mm northern Alberta oil sands mining project.
Shell Canada said BHP agreed to work on a pre-feasibility study for the Lease 13 project, expected to produce 120,000 to 150,000 bpd of bitumen starting in 2002.
Shell Canada's Lease 13 development would be the country's biggest new oil sands mining project in 25 years.
Under the agreement, BHP will contribute its mining know-how and pay 25 % of the costs of the study, which is to be completed this year, Shell Canada said. The pre-feasibility study was required to confirm the commercial viability of the project. The study will include a development plan and application for regulatory approval to build a mine and bitumen extraction plant at the site, 44 miles north of Fort McMurray, Alberta.
The Fort McMurray region is the site of Canada's two largest oil sands mining, extraction and upgrading operations run by Syncrude Canada Ltd. and Suncor Energy Inc. The two operations pump out just under 300,000 bpd of synthetic crude oil, equal to about 20 % of Canada's total oil demand.
"The combined strength of a world class mining house and a world class oil company will go a long way toward making this project a success,'' Shell Canada Vice-President Neil Camarta said.
When Shell Canada disclosed its intentions last year to develop the project, Camarta said the firm was searching for a mining industry partner to help develop the open-pit project. Lease 13 was acquired by Shell Canada in 1956 but never developed despite two previous proposals. Shell Canada filed its latest plan with Alberta regulators in March 1997.

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