Royal Dutch Shell Plc began commercial production from an expansion of its Scotford oil-sands upgrader that will boost capacity by 64 percent at the Alberta facility.
The expansion will add 100,000 barrels a day of bitumen processing capability at the plant, 25 miles (40 kilometers) northeast of Edmonton, Shell said in a statement. The plant will be able to run 255,000 barrels a day.
Shell and its partners in the Athabasca Oil Sands Project have been expanding mining of oil-soaked sands in northeastern Alberta. Bitumen, or extra-heavy oil, is diluted and shipped to upgraders where it can be refined into other petroleum products. Non-upgraded bitumen sells at a discount to regular crude oil.
“They had a mine expansion last fall that added about 100,000 barrels a day of bitumen,” said Mike Dunn, an analyst with FirstEnergy Capital Corp. in Calgary. The reduction of bitumen in the market is “good for heavy oil products,” he said.
Shell said it will now work on improving operating efficiencies at the Scotford complex, which includes a refinery with a capacity of about 98,000 barrels a day. The company is also working on a carbon capture and storage project at the facility.
Shell, which is based in The Hague, owns 60 percent of the Athabasca Oil Sands Project. Marathon Oil Corp. and Chevron Corp. split the rest.