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Canadian Natural Resources Limited 1st Qtr 2008 Horizon Oil Sands Update

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This topic contains 5 replies, has 3 voices, and was last updated by  Anonymous 14 years, 3 months ago.

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  • #3663


    CALGARY, ALBERTA–(Marketwire – April 30, 2008) – Canadian Natural Resources Limited is pleased to provide its regular quarterly update on the Horizon Oil Sands Project (“Horizon Project”).

    “It is an exciting time for the Horizon Project as we methodically progress towards first oil targeted for the third quarter of 2008.” commented Réal Doucet, Senior Vice President, Oil Sands. “In the first quarter, Mine Production commenced operations, using our mine operators and equipment to work on the overburden removal. This is the second area of the Horizon Project where we have begun operations, with water systems being the first, and represents a significant milestone for Canadian Natural. This early operation provides tremendous training benefits for our operators prior to full start up.

    We reached an overall 94% completion at the end of the first quarter of 2008, with craftspeople actively performing hydrotests, airblows, rotation checks and various pre-commissioning activities. Our operations teams are walking down the systems in each plant ensuring they are complete prior to commissioning. We have energized the last substation on site and the Extraction Plant started operating on water in late April to ensure there are no surprises when we begin processing oil sands and extract the bitumen through these plants.

    Commissioning is progressing very well as we have already turned over and commissioned 96 plant systems (out of an estimated 820), 10 mine haul trucks (out of 23), 2 hydraulic shovels and are preparing to commission the first electric shovel, all according to schedule. The balance of the mine equipment will be turned over and commissioned to support the ramp up of oil sands mining and bitumen production.

    As we move to construction completion, challenges arise on a regular basis; however due to the strength, experience and depth of our team we continue to meet and find solutions as we target start up and synthetic crude oil production in the third quarter of this year.

    At the end of the first quarter, capital spending on Phase 1 of the Horizon Project was at 111% of the original budget of $6.8 billion. Looking forward to completion, targeted for the third quarter of 2008, we currently anticipate capital spending on Phase 1 construction to be within the previously announced range of 25%-28% above the original budget.

    We have maintained solid progress in our hiring of operators with 89% of required personnel in place and have finalized all of our maintenance contracts and mobilized all supervision on site. We are prepared to start up the plants and have received on site the 190,000 barrels of diluent for start up.

    Once we have completed commissioning and begun operations, it is anticipated that ramp up to full production will occur over a 3 to 4 month period. We are targeting to be at 85% design capacity by year end 2008. Full capacity is anticipated to be achieved during Q1/09 as planned.

    The sales pipeline which will transport production from the site to Edmonton is on track for completion in the second quarter of 2008. Approximately 750,000 barrels of synthetic crude oil from initial production volumes will be used to fill the pipeline.

    While our focus remains on completion and startup of Phase 1, we continue to plan for future expansions. We have received the 2 coke drums and all components for the 2 hydrotreating reactors that will be installed as part of the Phase 2/3 expansion.”

    For more information
    Canadian Natural Resources Limited
    2500, 855 – 2nd Street S.W.
    Calgary, Alberta
    T2P 4J8

  • #6890


    Not sure whoever wrote this update even reads / looks at thier own CNRL website.
    Example – talks about 2 coke drums having arrived but last CNRL update & photo links for progress 2007 & 1Q2008 = show that foundations were poured & drums already set way back in 3Q 2007?
    Horizon upgrade coker is lot futher along than this report indicates – probably targeted for financial types.

  • #6887


    Update by CNRL is correct. The Coke Drums you are referring are for phase 2 of the Upgrader (in addition to the 4 already installed in 2006 at the structure). They were manufactured in Edmonton and shipped to site to be stored until installation sometime in the near future.

  • #6878

    Charles Randall

    The info on CNRL phase 2 coke drums is good additional information. The Horizon mine project has been hard to keep up with but overall it was to go from the current CNRL production on Cold Lake /Primrose mine at 232 MBD to final 500 MBD production by 2015-17 after Horizon mine Phases/capacity are added in.
    The Horizon Phase 1 was to complete in 2008 and adds 110-135 MBD, adding new DCU (delayed coking unit) & DRU (Distillate recovery Unit) which would account for 4 drums already mentioned and ~360 MBD production. If Phase 2-3 completes in 2010-11 and adds 2 additional drums now mentioned for another 110-135 MBD. The last Phases (4-5?) would add final units and round up capacity to the 500 MBD targeted.   Like all these Canada Bitumen projects the Upgrader & Coker additions seem to overlap & leapfrog into next stage.  I understand Phase 2-3 started in 2006 & at least $124 MM has already been spent on this phase.
    Do we know if the CNRL Upgrade coker is going to add the drums onto existing 4 drum fractionator or start /add another coker unit/fractionator? <Example Suncor adds drums until fractionator has 6-8 drums & then started new unit – it is on its 3rd Fractionator now with next 4 drums in Firebag stage>
    Also CNRL has lot other Long Term In-Situ/SAGD projects announced / on planning board -are any of those planned to feed into the Horizon Upgrader/Coker or  new Upgraders in Northern region? <RE: SAGD CNRL Birch Mountain (P1 & 2), Gregory Lake (P1-4), and Kirby projects>
    I have started spreadsheet trying to track mine/In-Situ projects, Upgraders, type Bitumen/Syncrude produced & where it feeds into. If anyone already has one filled out – I would be glad to trade information?
    Thanks for the coke drum info build – they must have been ordered about the same time as original 4 drums. I dont have the Coker Technology down for either FW or COP – are ABB/Lummus doing EPC & trying do Technology?

  • #6665

    Charles Randall

    Canadian Natural Reports Quarterly Loss on Contracts (Update3)

    By Ian McKinnon and Nicholas Larkin
    Aug. 7, 2008 (Bloomberg) — Canadian Natural Resources Ltd., whose C$9.27 billion ($8.85 billion) oil-sands project is behind schedule and over budget, posted a second-quarter loss on lower values for contracts used to lock in commodity prices. The company cut its oil-output forecast.
    The net loss was C$347 million, or 65 cents a share, compared with a profit of C$841 million, or C$1.56, a year earlier, the Calgary-based company said today in a statement. Excluding one-time items, the company exceeded the average estimate of 14 analysts compiled by Bloomberg by 34 cents.
    The company beat expectations on high oil prices and lower- than-expected taxes, said Ben Dell, an analyst with Sanford C. Bernstein & Co. in New York. Canadian Natural boosted capital spending by as much as 20 percent while output fell, he said in a telephone interview.  “It was a pretty unimpressive quarter because of weaker production, higher costs and increasing capital expenditures,” said Dell, who rates the company’s shares as “market perform” and owns none. His estimate for per-share earnings was C$1.49.
    Canadian Natural rose C$4.37, or 5.5 percent, to C$83.65 on the Toronto Stock Exchange as rising oil prices in New York contributed to gains by 43 of the 71 members of the S&P/TSX Energy Index.
    Costs for the company’s Horizon oil-sands development have risen an additional 8 percent and the northern Alberta development is 36 percent higher than originally budgeted, the company said late yesterday in a statement. The 110,000-barrel-a day project will start producing refinery-ready crude in the fourth quarter instead of the third.
    Horizon Project
    President Steve Laut, 50, is boosting oil production to capitalize on New York prices that rose 90 percent in the quarter from a year earlier. Horizon includes a mine and an upgrader, a plant that processes extra-heavy crude extracted from tar-like deposits into synthetic oil. The oil will be sold to refiners and made into fuels such as gasoline and diesel.
    Revenue at Canadian Natural, which produces oil and gas in North America, the U.K. and Africa, increased 62 percent to C$5.11 billion. Excluding one-time costs such as hedging and stock-based compensation, Canadian Natural said it earned C$1.78 per share. On that basis, it exceeded analyst expectations of C$1.44.
    The company said it has a 20-year agreement to sell 100,000 barrels a day of heavy sour crude to an unidentified U.S. refiner. It has also committed to ship 120,000 barrels a day for 20 years to the proposed Keystone Pipeline project. Canadian Natural has an option to purchase a 10 percent stake in Keystone, Laut said today in a conference call with analysts.
    Keystone Stages
    Calgary-based TransCanada Corp. and partner ConocoPhillips, based in Houston, are spending $5.2 billion to build the initial stage of Keystone, which will transport 590,000 barrels a day of Canadian oil to Midwest refiners by 2010. A second stage, estimated at $7 billion, will boost capacity to as much as 1.1 million barrels a day and enable Canadian oil to reach Gulf Coast refiners.
    Canadian Natural’s gas, excluding hedging, sold for an average of C$9.89 per 1,000 cubic feet, up 33 percent as futures in New York rose. Gas production fell 11 percent to 1.53 billion cubic feet a day. The company ranks behind only Calgary-based EnCana Corp. for Canadian gas output.
    Production of oil fell 2.6 percent to 319,077 barrels a day, the company said. Before hedging, Canadian Natural’s oil sold for an average of C$103.73 a barrel, almost double the year-earlier price.
    The company expects 2008 daily production will average 308,000 to 350,000 barrels of oil, down from a May forecast of 316,000 to 366,000 barrels a day.  The company’s capital spending forecast was boosted C$6.97 billion, up from the May prediction of C$5.79 billion to C$5.99 billion.
    (Canadian Natural started a conference call at 9 a.m. New York time, accessible on the company’s Web site at
    To contact the reporters on this story: Ian McKinnon in Calgary at; Nicholas Larkin in London at

  • #6664

    Charles Randall

    Here is update new release on CNRL Horizon Upgrader & Coker project and the Keystone OS crude pipeline.
    The Horizon Phase 1 was to complete in 3Qtr 2008 (was 94% complete in 1Qtr 2008 but now delayed completion until 4Qtr 2008) and adds 110-135 MBD, adding new DRU (Distillate recovery Unit) & new DCU (delayed coking unit) which are the 4 drums that were installed in 2006 (see guest earlier comments) and ~360 MBD production.
    The Phase 2-3 completes in 2010-11 and adds 2 additional drums (received 2008) for another 110-135 MBD. The last Phases (4-5?) would add final units and round up capacity to the 500 MBD targeted.   Like all these Canada Bitumen projects the Upgrader & Coker additions seem to overlap & leapfrog into next stage.  Phase 2-3 started in 2006 & at least $124 MM has already been spent on this phase (coke drums & all components for 2 hydrotreater reactors).

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