Experienced Operator

Stage 3 begins operating

Stage 3 commenced operations on August 30, 2006. The project originally came on-line in May 2006, but was temporarily suspended when Alberta Environment issued an environmental protection order in response to reports of unpleasant odors.

The source of these odors was the ammonia being used in the new flue gas desulphurizer (“FGD”). The FGD is designed to scrub the sulphur emissions from the new coker by combining these emissions with ammonia. Analysis indicated the ammonia produced at the Syncrude operation contains impurities, including odor-causing compounds. Syncrude is currently purchasing aqueous ammonia to support the operation of the FGD and is investigating a solution that will enable it to use the on-site produced ammonia.

The FGD is now doing what it was designed to – significantly reducing S0₂ emissions from the expanded facilities and producing an ammonium sulphate slurry. This slurry is being supplied to an on-site plant operated by Marsulex, who use it to produce a marketable fertilizer product.

The Stage 3 project also was designed to improve product quality for all the barrels coming out of the plant from SSB to SSP. The transition to this higher quality crude has been delayed to the fourth quarter of 2007 as Syncrude must first make modifications to the steam generation unit of the new hydrogen plant. The modifications are not expected to be complicated or costly, and Syncrude plans to perform them during planned turnarounds in the fall of 2007 to minimize any lost production.

Syncrude’s Stage 3 facilities have the design capability to produce approximately 375,000 barrels per stream day when operating at full capacity under optimal conditions and with no downtime for maintenance or turnarounds. This daily production capacity is referred to as “barrels per stream day”. However, under normal operating conditions, scheduled downtime is required for maintenance and turnaround activities and unscheduled downtime will occur as a result of mechanical problems, unanticipated repairs and other shutdowns. When allowances for such downtime are included, the daily design productive capacity of Syncrude’s post-Stage 3 facilities is approximately 350,000 barrels per day on average and is referred to as “barrels per calendar day”.

Syncrude’s primary objective is to reach design capacity of 350,000 barrels per calendar day as soon as possible, although we anticipate that a period of stabilizing the new facility is required before we can ramp up to full production, during which production levels will likely fluctuate. For 2007, we are forecasting Syncrude production to average about 300,000 barrels per day.

In the future, it is possible that we may even be able to exceed design capacity. Similar projects, including Syncrude’s original base plant, have surpassed name plate capacity through various optimization efforts.