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Shell’s Mining Operations

Diagram depicting process

Shell Albian Sands consists of the Athabasca Oil Sands Project’s (AOSP) two mines, Muskeg River Mine and the Jackpine Mine.

Watch the YouTube video about Athabasca Oil Sands Project’s (AOSP)

Shell is the operator and majority share holder of the Athabasca Oil Sands Project, a joint venture between Shell Canada (60%), Chevron Canada Limited (20%) and Marathon Oil Canada Corporation (20%), which consists of Shell Albian Sands mining and extraction operations, north of Fort McMurray, the Scotford Upgrader and the proposed Quest Carbon Capture and Storage (CCS) project located north of Edmonton.

At our two mines, mining shovels dig into the sand to excavate the ore containing bitumen. Large trucks – each capable of carrying 400 tonnes, take the oil sands to crushers where it is prepared for extraction. Using warm water the bitumen is separated from the sand and clay. The thick bitumen is then diluted with a solvent so that it can be transported via pipeline to the Scotford Upgrader and converted into synthetic crude oil.

The Muskeg River Mine’s current production capacity is 155,000 barrels per day and the Jackpine mine is somewhat smaller, with capacity to produce 100,000 barrels per day.

Growth: Shell sees opportunities for growth in its oil sands operations. Potential future growth is being planned in the following areas:

Debottlenecking:

  • In the near term, growth will come from a series of debottlenecking projects, which could add up to 85,000 barrels per day over the next ten years.

Jackpine Mine Expansion:

  • Regulatory approval is currently being sought for a 100,000 barrel per day expansion of the Jackpine Mine.

Pierre River Mine:

  • Regulatory approval is also being sought for the proposed Pierre River Mine development. The proposed mine would yield another 200,000 barrels per day.
     

The design capacity for the mining facilities is based on an assumed average percentage of bitumen in the oil sands ore. Actual production will depend on the ore grade as well as other operational parameters associated with any conventional oil or gas facility.

Shell strives to be the leading company in environmental performance in Heavy Oil through actions that generate significant improvement in CO2, water and tailings management.

Water: While Shell has permits to withdraw 0.6 per cent of the Athabasca River’s average annual flow, we used less than 0.12 per cent in 2011. About 78 per cent of water used in the bitumen extraction process was recycled from tailings ponds at our two mines. Our mines used about 2.0 barrels of freshwater for every barrel of bitumen produced. No water from our mining and extraction operations is returned to the Athabasca River.

Carbon Dioxide: Fuels produced from oil sands bitumen typically emit five to15 per cent more carbon dioxide (CO2) than conventional crude oil on a wells-to-wheels basis. Our analysis indicates that Shell’s operations are at the lower end of that range – about six to seven per cent more intensive – as a result of emissions reductions already in place.

We have developed a CO2 strategy, focused on making our operations more energy efficient, with targets for the near, short and long term future.

Tailings and reclamation: Since 2005, Shell has invested nearly $200 million in tailings research to develop technologies to speed up the drying of tailings from years to weeks.

Oil sands mining generates tailings, a mixture of water, sand, clay and residual hydrocarbons that remain after the bitumen is extracted. Tailings can be either stored in an above ground tailings pond known as an external tailings facility or in mined-out pits.

Placing tailings mined-out pits marks the first stage of reclamation. Eventually, nearly all of the water will be removed and the remaining solid tailings will be blended and treated to produce material suitable for use in land reclamation.

The coarse sand found in tailings is relatively easy to manage because it settles rapidly and can be used to fill in the mined-out pit for reclamation and for construction purposes. The main challenge with tailings is the decades it can take for the clay and silt particles to settle to a more dense material.

During the settling process, tailings facilities provide water for reuse in the bitumen extraction process which minimizes freshwater use.

Shell is deploying several methods to deal with tailings, including:

  • Thickened Tailings
  • Non-Segregated Tailings
  • Composite Tailings
  • Atmospheric Fines Drying

You can learn more about these technologies in our 2011 Oil Sands Performance Report or by viewing the Shell’s approach to tailings video.

People: Shell Albian Sands has more than 2,300 employees and thousands of contractors.

Since 2005, we have spent over $1 billion with Aboriginal contractors who provide a broad range of products, and services including facilities management, technical expertise, bussing, camps and catering and waste management.

Social Investment: While the most significant opportunities we bring to the communities in which we operate are directly related to our operations, Shell also contributes to the general well being of the communities around our operations.

In 2011, the AOSP contributed over $3 Million to the communities around its operations, through our Shell Community Service Fund, FuellingChange and the United Way. Projects included a $25,000 donation to the Big Brothers Big Sisters of Wood Buffalo for their Full Circle Mentoring Program and $20,000 to the Athabasca Delta Community School for their family resource room. Shell and its joint venture owners contributed $1 million over three years to fund the Father Patrick Mercredi High School’s Science & Technology Centre in Fort McMurray. Visit www.shell.ca/community for more information on Shell’s social investment.