November 29, 2007 at 8:48 am #3864
Petro-Canada Montreal coker cost pushed to C$1 bln
By Scott Haggett Wed November 28, 2007
CALGARY, Alberta (Reuters) – Petro-Canada said on Wednesday it could cost up to C$1 billion to install a new unit so its Montreal refinery can process cheaper heavy oil, the upper end of its estimated price tag for the project.
Petro-Canada is mulling adding a coker unit to the 130,000 barrel a day Montreal refinery, with a final decision expected within weeks.
The coker would let the facility process 25,000 barrels a day of inexpensive Mexican heavy crude oil, displacing more-expensive light oil and boosting profits.
But costs, estimated just two years ago at C$600 million, have risen as the firm, Canada’s No. 4 oil refiner and explorer, completes its engineering and design work.
“We’ve narrowed down our estimate to about C$1 billion,” Dan Sorochan, Petro-Canada’s vice-president for refining and supply told a company-sponsored investment conference. “That’s at the higher range of our original guidance, but the economics continue to look very solid.”
The company said the project could boost annual cash flow by as much as C$130 million. The coker could begin operating by late 2009.
Sorochan said Quebec approved construction last week but the company was still studying conditions placed on the project by the provincial government.
Petro-Canada is also in the middle of a C$2 billion revamp of its 190,000 barrel per day refinery near Edmonton, Alberta. It said costs may rise for the project because of labor turmoil at the site this summer.
It gave no new budget estimate for the work, which will let the refinery operate using synthetic crude oil and tar-like bitumen from the oil sands.
(Editing by Janet Guttsman)
November 29, 2007 at 9:10 am #7153
Here is recent update on Petro-Canada’s Montreal coker project – sounds like the decision on the coker will be $600 million has almost doubled to $1 Billion (for 25 MBD coker this works out to be ~$25,000/BBL coker charge the high end scale) but as economics show the earnings at $130 million/year still pay out the investment to use the heavy crude. The coker could be online by 2009 if project gets approved on current timeline.
This news flash also mentions the Petro-Canada $2B revamp at Edmonton where it is in the middle of expanding the refinery & an upgrader to process Canadian Heavy Bitumen crude. The cost on the 190 MBD refinery expansion are expected to also increase as result of the labor turmoil this summer at the site. <Think this started in 2006 and was to complete by 2008>
It was estimated that Petro-Canada had ~450 MBD of Bitumen production in 2006, which includes it’s ~12% ownership of Syncrude’s operation (and the startup of Syncrude Stage III expansion which also increase PC’s share) & ~55% of Fort Hills project. (There was also some additional East Coast oil from ramp up of White Rose project but it was offset by 14 day turnaround at Terra Nova.)
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